Farmers are worried about the increasing tax burden

On Wednesday, August 26, representatives of the association "Farmers' Parliament" met with Minister of Finance Jānis Reiras to discuss next year's tax policy affecting the industry.
Agriculture has been facing a very unfavorable market situation in the past year. There are several reasons for this – low world market prices, the Russian food embargo, climatic conditions, diseases, etc. Such a simultaneous coincidence of unfavorable factors is very rare, but unfortunately it does happen. In conditions when so many sectors are on the verge of survival, such as the dairy industry and pig farming, it is very important not to worsen the situation by raising the tax burden on the part of the state. Currently, when the process of forming the state budget for next year is actively underway, the leaders of the Farmers' Parliament met with the Minister of Finance to discuss issues that concern farmers.
The main subject of discussion was the planned rapid increase in land tax. The current regulations provide that in the next 5 years the land tax will increase by up to 20 % annually. The Farmers' Assembly believes that such a rapid increase is unacceptable and the tax increase cannot be greater than 10 %. On this issue, an agreement was reached that repeated negotiations between the Ministry of Finance, the Ministry of Agriculture and local governments will take place in the near future, on the possibilities of reducing the rate of tax increase and planning the increase over a longer period of time.
The second pressing issue that occupies the mind of every farmer is the inclusion of EU subsidies and state aid in the amount of taxable income, planned from 2017. Taking into account the fact that our farmers have to compete in the common EU market with the least support, the previous approach, when subsidies were not included in taxable income, allowed farmers to use the entire amount of these subsidies to invest in the modernization of production or purchase land for agricultural use. If farmers work with profit, then the previous state policy of not including subsidies in taxable income conditionally increased the amount of these subsidies by 15 %, allowing them to get closer to the level of subsidies at least to farmers in neighboring countries! On this issue, the participants of the meeting agreed that it is necessary to also involve the Ministry of Economy and Justice in the conversation.
Juris Lazdiņš, Chairman of the Board of the Farmers' Assembly, comments on the meeting and adds: "I am glad that Mr. Reira found the opportunity to meet with us during the tense budget process. The conversation proved that such working meetings are very important, because the agricultural sector, which is mainly regulated by the European Union, not the Latvian government, is very complex. We, Latvian farmers, must comply with all the rules made in Brussels and be able to compete with farmers in countries that have had more time to accumulate capital in order to survive crisis situations."