The bill will now be considered by the Saeima.
So, it happened: today the Cabinet of Ministers supported the proposal of the Ministry of Culture to de facto deprive literature and periodicals in the Russian language of tax benefits. A VAT rate of 21% is being introduced for them instead of the 5% that was in place until now. Meanwhile, the reduced tax rate of 5% remains for publications in the Latvian language, as well as for publications in the official languages of EU countries, EU candidate countries, and OECD countries. Thus, the state is ready to support the press and literature, for example, in Romanian, Czech, and other languages commonly spoken in Latvia, but not in the native language of a third of Latvia's population, Russian. As they say, democratic!
It is noteworthy that the Latvian Confederation of Employers opposed such changes in the tax sphere. Here is what their letter to the government states: "The Latvian Confederation of Employers (LCE) reminds that in September 2024, the government and social partners, after lengthy negotiations and mutual consultations, agreed on the main tax settings in the medium term, which included a number of changes to the tax system of Latvia, set to take effect in 2025. The aforementioned agreement also includes a commitment that the tax system will not be subject to significant revision until 2028, as it is important to maintain predictability of the system for taxpayers, potential investors, and other stakeholders.
Therefore, the confederation expresses its bewilderment regarding the government's proposal for unplanned tax changes that were not discussed with social partners, thus ignoring social dialogue."
But the ruling party has already made its decision, and it seems they do not care about the opinions of social partners. The draft amendments to the Value Added Tax Law have been supported by the government and will now be submitted to the Saeima, which is to have the final say. Notably, the deprivation of tax benefits for newspapers and magazines published in Latvia (!) will occur without a transitional period, meaning the 21% rate will be introduced starting January 1, 2026.
