Latvia Stumbling Towards Progressive Income Taxation: Episode II

Anna Pluta () and Anna Zasova ()
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Anna Pluta: Baltic International Centre for Economic Policy Studies (BICEPS)
Anna Zasova: Baltic International Centre for Economic Policy Studies (BICEPS)

No 10, SSE Riga/BICEPS Occasional Papers from Baltic International Centre for Economic Policy Studies (BICEPS), Stockholm School of Economics in Riga (SSE Riga)

Abstract: In August 2017, the Latvian parliament adopted a major tax reform package that will come into force in January 2018. This reform was a long-awaited step from the Latvian authorities to make the personal income tax more progressive. Some of the elements of the adopted reform, e.g. the changes in the basic tax allowance are estimated to help reducing the tax wedge on low wages and help addressing the problem of high income inequality. At the same time, the way the newly introduced progressive tax rate is designed will effectively lead to a reduction in the tax burden on labor and will hardly introduce any progressivity to the system.

Pages: 15 pages
Date: 2017-11
New Economics Papers: this item is included in nep-cis and nep-tra
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Citations: View citations in EconPapers (3)

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