Latvia: Central bank supports planned new tax on banks

Latvia’s central bank, the Bank of Latvia, supports the Finance Ministry’s plan to introduce a mandatory requirement that banks pay corporate income tax on their profits in advance, LSM reports. Martins Kazaks, governor of the Bank of Latvia, argued that the solution should be permanent, thus ensuring that banks contribute to the state budget every year, regardless of whether they pay dividends or not. Moreover, he suggested that similar tax changes could be applied to other sectors as well if necessary. Kazaks urged commercial banks to be more concerned about their customers and more involved in the economy. Under the Finance Ministry’s plan, banks would be obliged to pay 20% of their profit for the previous year in corporate income tax in advance. Finance Minister Arvils Aseradens said that the measure would allow the state to collect profits from banking operations during the current year.

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