Latvia will confirm the planned tax reform in May

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Ukraine plans to accelerate privatization

Slovakia will continue consolidation of public finances

Latvia

The guidelines for the tax system reform are to be confirmed by the government at the beginning of May, after the meeting of Prime Minister Maris Kucinskis (from the coalition of Greens/Farmer) with the representatives of Unity party. The blueprint for the national tax policy framework 2018-2021 was prepared by the Finance Ministry.

The tax reform will include:

  • decreasing personal income tax rate from 23 per cent to 20 per cent;
  • removing solidarity tax;
  • retaining microenterprise tax.

Personal income tax is to be cut to 20 per cent for the income that does not exceed EUR45,000 a year. Those who earn more will be charged 23 per cent.

The Leta Agency reports that other changes have been planned, including the hike of excise taxes on fuel, cigarettes and alcohol.

In 2016 the World Bank and the OECD called Latvia to undertake “a fundamental tax reform” as the system was not coherent.

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Ukraine

Ukraine’s Prime Minister Vladimir Groysman’s declarated an accelerating of a privatization process. The Interfax publishes an interview with Katharina Maternova, European Commission Deputy Director-General for Neighbourhood Policy and Enlargement Negotiations, who expresses her hopes that 2017 “will be watershed moment for the privatization in Ukraine”.

Maternova confirms that almost nothing has been done in the field of privatization so far. At the same time, she gives three reasons why it should be re-started or kick-started immediately: “One is because it eliminates corruption. SOEs have been one of the factors for it and that is something that was true in all the other countries, Ukraine is not an exception. Secondly, is because the government is not a good owner of over 3,000 enterprises. Thirdly, because this is the fastest and the best way how to bring capital, technology, managerial know-how into the country.”

She also points out two or three positive examples of good, transparently conducted transactions that could send a good signal to foreign investors community and boost the further process.

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Slovakia

After the Eurostat revealed the data on 2016, Slovak Finance Ministry confirmed it will continue fiscal consolidation in the following years. This year’s public deficit is projected to be 1.29 per cent of GDP.

As for 2016 the country reduced the general government deficit to 1.68 per cent of GDP (0.28 percentage points less than planned). Also the government debt decreased to 51.94 per cent of GDP. It means the results has been better than in the record-year 2007.

The Slovak Spectator quotes the Finance Minister Peter Kazmir, saying in 2016 “Slovakia consolidated its public finances faster than planned and this happened thanks to the positive economic development, increasing effectiveness of tax collection and positive fiscal performance of self-governments”.

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What’s up in indexes

BET (of Bucharest) increased from 8,237.34 index points Friday, April 21st to 8,296.75 index points Monday, April 24th. It’s up 0.72 per cent d/d and up 26.35 per cent y/y.

BUX (of Budapest) increased from 32,969.44 index points Friday, April 21st to 32,226.46 index points Monday, April 24th. It’s up 0.78 per cent d/d and up 23.50 per cent y/y.

CROBEX (of Zagreb) decreased from 1,949.21 index points Friday, April 21st to 1,945.25 index points Monday, April 24th.  It’s down 0.20 per cent d/d and up 18.65 per cent y/y.

OMXR (of Riga) decreased from 806.90 index points Friday, April 21st to 805.37 index points Monday, April 24th. It’s down 0.19 per cent d/d and up 29.01 per cent y/y.

OMXT (of Tallinn) increased 1,117.40 index points Friday, April 21st to 1,117.43 index points Monday, April 24th. It’s up 0.00 per cent d/d and up 15.41 per cent y/y.

OMXV (of Vilnius) increased from 576.97 index points Friday, April 21st to 580.07 index points Monday, April 24th. It’s up 0.54 per cent d/d and up 16.02 per cent y/y.

PX (of Prague) increased from 977.87 index points Friday, April 21st to 992.52 index points Monday, April 24th. It’s up 1.50 per cent d/d and up 8.79 per cent from year-end.

SAX (of Bratislava) increased from 308.53 index points Friday, April 21st to 310.65 index points Monday, April 24th. It’s up 0.69 per cent d/d and down 5.86 per cent y/y.

SOFIX (of Sofia) decreased from 657.97 index points Friday, April 21st to 657.93 index points Monday, April 24th. It’s down 0.01 per cent d/d and up 51.64 per cent y/y.

UX (of Kyiv) increased from 1,026.23 index points Friday, April 21st to 1,032.33 index points Monday, April 24th. It’s up 0.59 per cent d/d and up 66.03 per cent y/y.

WIG20 (of Warsaw) increased from 2,264.07 index points Friday, April 21st to 2,296.90 index points Monday, April 24th. It’s up 1.45 per cent d/d and up 19.30 per cent y/y.

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