A meeting of Cabinet Ministers was called on 6th December 2010 to agree a draft state budget for 2011.
This paper currently calculates combined budget revenue for 2011 at 5.1 billion lats (7.2 billion euros) and expenditure of 5.7 billion lats.
Also tackled at the meeting was fiscal policy framework for 2011 through to 2013 and medium term macroeconomic development.
Communications are still underway with international lenders which could lead to further budget corrections. On the 8th December the parliament began forwarding their draft paper on to budget committees, it is envisioned that the budget plans will be formally agreed before the Christmas break.
VAT is likely to be raised to 22% and due to a projected improvement in economic activity because of a projected drop in unemployment, the rise in retail trade and the general improvement financially of local companies, the government will accumulate 5.4% more taxes in 2011 compared to 2010.
But overall when looking at the bigger picture the economies of the Baltic’s and Europe should start to see an improvement which can be tremendous news for businesses.
