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Agreement reached on raising social fees; discussions on PIT progressiveness to continue

Maris Kucinskis/flickr.com/State Chancellery.
Partners of the ruling coalition have reached an agreement on the increase of social fees. Discussion about greater PIT progressiveness, however, will continue, Latvian Prime Minister Maris Kucinskis told journalists after the meeting of the coalition.

Coalition partners have full agreement and understanding over healthcare matters. «Partners have entered the final phase in regards to the tax reform,» said the prime minister. He also expressed confidence that all work will be completed.

Social fees are intended to be raised to increase funding for healthcare. It is expected that social fees will grow – by half a percentage point – for employers and employees. A special fee may be calculated for those who do not pay taxes. Partners have not yet discussed the amount, but an agreement has been reached nonetheless that there will be a specific fee associated with average wage, said the prime minister. This way people would gain mandatory health insurance.

As for PIT progressiveness – coalition partners are still waiting for Finance Ministry’s estimates to continue discussions. The prime minister said partners agreed not to proceed with budget deficit.

Healthcare Minister Anda Caksa said minimal healthcare services basket will include family physician services.

Previously Maris Kucinskis’ healthcare work group agreed to offer coalition partners two possible funding sources for healthcare – the proposal to tie mandatory social insurance to minimal social fees and divert 1.5% of the social budget to healthcare and raising VAT by one percentage point to compensate it, or introducing mandatory health insurance with fixed or differentiated monthly fee.


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