Latvia: How to shape the economic climate in the long term


Latvia’s enviable economic policy

The Latvian government on Thursday extended a law under which newly founded firms only pay nine percent value added tax in the first three years.

The Estonian business daily Äripäev looks enviously at the Latvians:

“With this step a law has been formulated and extended which is clearly aimed at bolstering small companies. And this is not the only important decision. In Latvia there’s an upper limit for social contributions on salaries above 3,867 euros. The goal is to promote the creation of highly paid jobs. These are clear examples of how to shape the economic climate in the long term. … Moreover they highlight very clearly the fact that if at the start of the century Estonia was the pioneer in the region with fresh new ideas, we must now regard the Latvians with deference.”

Andrzej Vilenski
Andrzej Vilenski, the Baltic Review correspondent is a PhD student at the University of Vilnius, studying policy.

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