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LV Farmers: Tax policy needs improvements
On Friday, January 9, at 11:00 AM, leaders of farmer non-governmental organizations and dairy processing companies met with Finance Minister Jānis Reiras at the Ministry of Finance to discuss current issues in agriculture.
During the meeting, several issues relevant to farmers were discussed, such as the issue of colored diesel fuel intended for agricultural work, possible relief for the purchase of agricultural land, and the increase in real estate tax on uncultivated agricultural land owned by legal entities (up to 5%).
Taking into account the situation in the dairy sector, opportunities for stabilizing the sector and promoting competitiveness were discussed. The issue of reducing the value-added tax (VAT) rate for healthy food and employing seasonal agricultural workers on crop and livestock farms, as well as other issues relevant to farmers, were also discussed.
Minister of Finance Jānis Reirs: "S"This was our first mutual meeting, during which we discussed the current problems of farmers and agreed to create a tradition in the future by meeting at least once a quarter. It must be said, however, that on certain issues, such as the reduced VAT rate for food, the Ministry of Finance has repeatedly indicated that it is impossible to implement it. On the other hand, “green procurement” is an opportunity for our farmers to compete with suppliers of products from other countries. I would also like to once again call on those companies that have suffered from the embargo imposed by Russia to use the benefits offered by the state.”
Juris Lazdins, Chairman of the Association "Farmers' Council": "Today we introduced the Minister of Finance Jānis Reiras to the issues currently facing farmers. When discussing the seasonal agricultural worker tax, the Minister will evaluate the effectiveness of the system last year and continue to improve the system so that it can be introduced in other agricultural sectors. The Minister will evaluate the current situation with the real estate tax on uncultivated land. It is also possible to further decide on increasing the real estate tax rate for uncultivated agricultural land owned by legal entities. The Minister also pledged to seek solutions so that farmers can include the costs of land acquisition in the company's costs."
Ilze Aizsilniece, Deputy Chairwoman of the Board of the Latvian Agricultural Cooperatives Association, Chairwoman of the Board of LPKS "Piena ceļš": "This was our first meeting with the Minister of Finance, and in our opinion, this tradition should be continued by maintaining regular cooperation with the Ministry of Finance (MoF), because only in this way will we be able to find the best solution in difficult situations. The Minister and his colleagues undertook a series of homework - on the issue of relief for agricultural land, the MoF pledged to look at land in the future like any other means of production, looking for opportunities to link relief with depreciation. Regarding agricultural land owned by legal entities, the MoF indicated that municipalities are already allowed to add tax up to 3%, but the data available to the Rural Support Service (RSS) will also be analyzed. This time, we did not receive support from the Minister for reduced VAT on fresh and healthy food, it was indicated that the biggest beneficiaries will be traders, not producers and buyers. However, we agreed that the possibility of determining in law, similar to Germany, the amount of the markup that each of the participants in the "chain" - the producer, processor or seller - can apply will be evaluated."
Gustavs Norkārklis, Chairman of the Latvian Organic Agriculture Association, a member organization of the Farmers' Organizations Cooperation Council (LOSP): "The conversation with the Minister of Finance took place in a constructive atmosphere – listening to farmers’ opinions on improving tax policy. The Minister of Finance strictly rejected the proposal to reduce VAT on healthy food, as this is not possible given the current state budget situation. Also, no agreement was reached on the issue of not taxing subsidies after 2017. In turn, regarding the issue of labeled diesel fuel, it was promised during the negotiations to resolve the issues of labeled and unlabeled diesel fuel circulation in farms. We expect a positive solution regarding changes in personal income tax relief for the employment of seasonal agricultural workers in crop and livestock farms, because, as is known, the achieved tax relief applied only to seasonal workers employed in horticulture – fruit and vegetable farms.”
The Minister of Finance Jānis Reira met with Edgars Treibergs, Chairman of the Board of the Association of Farmers' Organizations Cooperation (LOSP), Gustavs Norkārklis, Chairman of the Board of the Latvian Organic Agriculture Association, Juris Lazdiņš, Chairman of the Association "Farmers' Council", Uldis Krievārs, Member of the "Farmers' Council" and owner of the "Pilslejas" farm, Ilze Aizsilniece, Deputy Chairman of the Board of the Latvian Association of Agricultural Cooperatives, Chairman of the Board of LPKS "Piena ceļš", and Anita Skudra, Head of SIA "Latvijas Piens".
Photo: Ministry of Finance