Mr. Vjaceslavs Dombrovskis:

One of the features of Latvian reform has been the simplification of the taxation system for paying salaries in small companies. We have some abysmal rates of personal income taxation. The combination of all personal income tax and social taxes that must be paid amounts to 46% of labour costs in Latvia, whereas the Irish equivalent figure, if I am not mistaken, is about half the Latvian figure. We have been working on this issue and a rate of simplified taxation has been introduced for a certain sum. Only minimal taxes are paid on 500 lats or slightly more than €700, with no questions asked. We have also been purposefully trying to reduce the taxation level applied to the workforce. As of 1 January, we will reduce the personal income tax rate by 1% and it will be decreased by 5% in the next three years.