The amendments to the law on tax solidarity are suspended

Latvijas 2 eiro monētas jostas uzraksts "Dievs svētī Latviju".

The Saeima’s Commission on Budget and Finance (Taxes) today decided, for the time being, not to push forward the amendments to the law on tax solidarity, leaving this question under the jurisdiction of the new government. The Minister of Finance of the outgoing government, a member of the commission, Dana Reizniece-Ozola, after the meeting of the commission, explained that without the adoption of these amendments, the tax rates would become invalid in 2019, that is, the solidarity tax could not be levied.

The commission’s chairman, Mārtins Bondars, noted that if the amendments were not adopted, it would probably be impossible to collect a solidarity tax from January 1. He doubted that the new government, which had not yet been formed, would have time to resolve this issue before the New Year.

According to the Ministry of Finance, the proceeds of solidarity tax in 2019 are projected at 60.29 million euros.

As reported, last year the Constitutional Court (CC), at the suit of legal entities, declared that only the tax rates established in Article 6 of the law on tax solidarity were not in compliance with the Constitution. The court decided to recognize this article is not consistent with the first phrase of Art. 91 of the Constitution and not in force from January 1, 2019, to give the government time to develop an alternative solution. Immediate cancellation of the article is impossible, since the plan has been approved for tax revenues.

After the decision of the Constitutional Court, the Ministry of Finance committed to eliminate the shortcomings in the application of the solidarity tax.

The Ministry of Finance proposes that the amendments to the law establish that the solidarity tax rate is the same as the highest rate of mandatory social security contributions, that is, 35.09%.