Latvian Chamber of Commerce wants impact of higher capital gains tax assessed
The Latvian Chamber of Commerce and Industry (LTRK) wants to discuss with the next government whether raising the capital gains tax rate has helped or held back the economy. It also calls for tax stability and for shifting personal income tax revenue toward the place of work.
The Latvian Chamber of Commerce and Industry (LTRK), the country's largest business association, intends to raise tax policy issues with the next government. Its head, Zariņa, said it is necessary to assess how the increase in the capital gains tax rate, carried out in the previous tax reform, has affected the economy.
Tax stability
Zariņa said that earlier governments had agreed on roughly three years of stability in taxation. This gives changes time to settle in and allows their effects to be judged. LTRK wants a similar understanding with the incoming government. In her words, the tax system should not be changed just for the sake of change. She added that labour taxes have always been the organisation's main focus.
Capital gains tax
One question that could be discussed with the new government is whether the higher capital gains tax rate has promoted economic development or, on the contrary, slowed it. LETA recalls that from 2025 a 25.5% rate applies to income from capital, including capital gains, and to the income of professional athletes. It also covers income of foreign taxpayers from professional activity as artists, athletes or coaches, royalties for literary, scientific or artistic works, and payments for discoveries, inventions and industrial designs.
Redistribution of personal income tax
LTRK will also certainly raise the split of personal income tax (IIN) between the place of residence and the place of work. Zariņa explained that at present the revenue goes to the municipality where a person lives. She argued that, to encourage business in the regions, a shift in favour of the workplace should be considered, so that municipalities are motivated to attract companies and act more actively.
About LTRK
LTRK has more than 8,000 members: 2,700 individual companies and 5,500 through business associations. They include micro, small, medium and large companies from all regions and sectors, as well as associations, city business clubs and other business groups.
