||Latvia Business News: Archive 2003-2006
Tuesday, the 16th of May, 2006
Retailers can celebrate
Aigars Stokenbergs, the Latvian Minister of Economics, has rejected the draft law on organization of retail trade which would significantly restrict the work of largest retailers. For example, it included a proposal to close large shopping malls on Sundays, which would give the smaller retailers a better chance to survive. It also tried to limit the practices of the largest retail chains, Rimi and VP Market. Both chains set their own rules for their suppliers, because none of them can be seen as dominating the market; each has about 30 per cent of it. Therefore, the law included evaluation criteria which would determine whether the retailer has significant influence, that is, whether its turnover in previous year was more than EUR 100 million. Stokenbergs believes that the law would decrease the offer and raise the prices. Food producers want to meet with Stokenbergs and discuss the reasons of his decision.
Wednesday, the 17th of May, 2006
German view on Latvian business
The German-Baltic Chamber of Commerce carried out a research on the investment environment in the Baltic States. 500 German businessmen working in the Baltic States were questioned. The opinion about Latvia is not unified: some are satisfied with the current situation, but some want changes. The largest advantage of Latvia is its workforce; businessmen are satisfied with the qualification and motivation of the workers. Additional funding from the EU structural funds and ties with local suppliers are less important. However, German businessmen are not satisfied with the Latvian government. They pointed out that corruption, bureaucracy, and lack of transparency is widespread and has a negative effect on business. They suggest changing the tax system, encouraging regional development, decrease the migration of workers, fight bureaucracy, increase the responsibility of government officials, and use the e-government more widely. However, most businessmen are satisfied with their decision to invest in Latvia.
Thursday, the 18th of May, 2006
Almost a billion collected in the first quarter
In the first 3 months of 2006, the Latvian State Revenue Service collected taxes of almost EUR 1,421 million, a 28.4 per cent increase from the first quarter of 2005. In April, SRS has collected EUR 375.32 million. A significant growth can be seen in collecting the corporate income tax; EUR 33.71 million were collected, a 42.8 per cent increase, as well as the VAT, EUR 99.37 million were collected, a 42.8 per cent increase. The State Revenue Service explained the increase in VAT revenue with increased taxpayer activity.
Friday, the 19th of May, 2006
Lower VAT wanted
The Joint Council of Farmer Organizations decided to bring up the question about decreasing the VAT for primary, that is, unprocessed food. In most agricultural business transactions, the payment is not made immediately, but VAT is calculated when invoice is prepared, not when farmer receives the money. Sometimes the farmers do not receive their money for several months and are unable to pay VAT. Smaller tax could improve the situation; moreover, the VAT for self-grown food is decreased or abolished in most EU countries, and Latvia has the highest VAT for food; that reduces the competitiveness of Latvian products in the local market. Aigars Stokenbergs, the Latvian Minister of Economics, however, believes that lower VAT might increase the demand, which in turn would increase the inflation. Moreover, Stokenbergs is not sure that retailers indeed will lower the prices.
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