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Reirs: it is important to reduce poverty risks and encourage honest paying of taxes

Jānis Reirs/flickr.com.
Participating in ‘National Development Plan 2020 – half-way through: can Latvian achieve its goals?’ conference, Latvian Welfare Minister Jānis Reirs emphasized how important it is to reduce inequality and poverty risks.

The minister said: «Pensioners should be paid 1% from their children’s paid social fees in addition to the pensions they are paid. Such a system would encourage honest taxpaying and solidarity among generations.»

The minister’s proposal provides that 1% from state social insurance fees, which is diverted for pension insurance, would be paid to each taxpayer’s retired parent.

For example, if a person’s salary is EUR 720, the 1% diverted for their parents would be EUR 7.20 a month. Because this amount would be paid to both parents, each would receive half, explained the minister.

He also mentions that such support would be provided to pensioners by only those taxpayers who pay the general regime rate – 35.09%. In addition, the more taxpaying children pensioners have in Latvia, the larger the pension bonus will be.

To realize this proposal, Welfare Ministry will form a work-group and involve the largest possible number of residents, because it is necessary to carefully assess legislative, economic, administrative, and social aspects.


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