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Rich man's tax to be charged on Latvia's highest-earning taxpayers

Xinhua, September 23, 2015 Adjust font size:

Latvian ministers at a cabinet sitting on Tuesday approved a new tax measure targeting some 4,700 of the highest earning taxpayers in the Baltic state.

The so-called solidarity tax, which is being decried by Latvia's entrepreneurs, will be applied to salaries exceeding 48,600 euros (about 54,000 U.S. dollars) a year, currently the taxable maximum for social security contributions.

Annual income exceeding the 48,600 euros will be taxed at the same rate as smaller wages, but the solidarity tax, which will be collected on the total salary minus the 48,600 euros, will go to the general government budget.

This means that the solidarity taxpayers will not be getting higher pensions, unemployment, parental or sickness benefits than taxpayers earning less than 48,600 euros a year.

The fiscal effect of the solidarity tax in the Latvian budget is expected to reach 40.9 million euros in 2016 and 46.1 million euros in 2017 and 2018. (1 euro = 1.11 U.S. dollars) Endit