Assessment of tax reliefs in agriculture in Latvia
2022
Leibus, Inguna | Bicevska, Agita | Mistre, Baiba
The development of fiscal policy requires a regular assessment of the granted tax reliefs and exemptions and their compliance with the national targets and guidelines. Farmers in Latvia receive significantly more and larger tax allowances than representatives of other sectors, so this is a very important task also in the agricultural sector. The research aim is to assess tax reliefs, their dynamics and impact on the tax burden in agriculture in Latvia. The most essential tax allowance in Latvia is social support for the population; however, despite this, Latvia still has one of the highest income inequality rates in the EU Member States. It is necessary to continue the reduction of labour taxes, which is also very important in agriculture, in order to reduce the income inequality. In line with the country’s move towards the “green deal” and an increasing use of more economical technologies in agriculture, it is recommended to improve the application of excise duty reliefs on diesel fuel. The tax exemption for subsidies needs to be assessed in detail, as the positive aspects of this relief have a number of negative ones, mainly income inequality related with the tax imposition and lower social guarantees for farmers.
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