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For quite a while - a long while - tax reform has been the major policy agenda item in Latvia.
For some time the idea for personal income tax reform was a higher non-taxed minimum together with a decrease of the income tax rate from 23% to 20%. In late June this was changed into a proposal with different tax rates (a progressive tax system) and the proposal now looks like (at least that's what I think - and who knows what exactly will be the final outcome?):
A 20% tax rate for income above the non-taxed minimum but below 20,000 EUR per year, i.e. 1666 EUR per month. A 23% rate for incomes between 1666 EUR and 4583 EUR (namely 55,000 EUR per year) and a 31.4% rate for incomes above 55,000 EUR per year/4583 EUR per month. A reduction of the solidarity tax though I am not sure what the exact proposal looks like. A maximum non-taxed minimum of 200 EUR for (presumably?) incomes still of 440 EUR or below, declining to 0 for incomes of 1000 EUR or more and an increase in the employee social tax from 10.5% to 11%.
