Next year, the consolidated budget revenue is planned at EUR 14.5 billion with the expenditure amounting to EUR 16.2 billion, provides the Law on the State Budget for 2024 and the Budget Framework for 2024, 2025, and 2026, adopted by the Saeima in the second and final reading on Saturday, 9 December.
Compared with 2023, the planned state budget revenue in 2024 will increase by EUR 1.76 billion, while the expenditure will increase by EUR 1.54 billion. The general government budget deficit is planned at EUR 1.3 billion, which amounts to 2.8 % of GDP. The main priorities of the state budget are internal and external security, education, and health.
In light of the current geopolitical situation, hybrid warfare threats, and economic challenges, the 2024 budget has been drafted with focus on strengthening national security and sustainability. Therefore additional security, education, and health investments are also investments in our fellow people, so that we can stand strong against various shocks and challenges, explained Jānis Reirs, Chair of the Budget and Finance (Taxation) Committee, which is responsible for advancing the draft budget in the Saeima.
Next year’s budget includes EUR 783.3 million additional available funding for implementing priority measures, including EUR 486.4 million for strengthening internal and external security, ensuring the provision and quality of health care services, and education.
Additional EUR 91.9 million will be spent on security: for raising the salaries of employees in the interior and judiciary; for ensuring external state border security measures; for developing external border infrastructure; for border guards; for cyber security and firefighter and rescuer capacity building.
Next year, funding for national defence will be 2.4 % of GDP, and it will gradually increase to reach 3 % of GDP by 2027.
Additional EUR 119.5 million will be allocated for education, and a large amount of funding will be dedicated to increasing the salaries of teachers currently earning the lowest hourly salary rate. Moreover, higher education, science, and transition to official language as the only language of instruction will also receive extra funding.
The third priority, health care, will receive an additional EUR 275 million. Funding has been allocated for increasing the availability of reimbursable medicines by expanding the coverage to include new medicines, as well as for reducing the waiting lists of medical exams and procedures. Additional funding will be provided for cardiovascular health, supporting oncology patients, and improving access to dental services for children. The salaries of medical staff will also increase.
The state budget for 2024 will support innovation, export, start-ups, and farms, as well as strengthen the competitiveness and exports of fruit and vegetable production and mitigate the consequences of natural disasters.
Regarding the social sector, the Law reintroduces old-age and disability pension supplements, boosts remuneration for assistants and companions to persons with disabilities, and increases support for families raising children with disabilities or coeliac disease. In addition, larger special care benefits will be available for persons of legal age who have been disabled since childhood.
The minimum income threshold and the state social security benefit will increase for persons of retirement age, persons with disabilities, and persons with disabilities since childhood. The reference amount for minimum old-age and disability pensions and the minimum survivor’s pension have also been increased.
Furthermore, additional funding has been earmarked for expanding the Latvian School Bag programme and ensuring that a broader range of schoolchildren can participate in its events.
Regarding taxes, 2024 will see measures for supporting small enterprise activity and reducing the administrative burden. For example, from now on, micro-enterprise tax will amount to 25 % of turnover instead of having two different rates (25 and 40 %).
Next year, value added tax on vegetables, berries, and fruit specific to Latvia will be 12 %, and VAT will no longer apply to fees for children’s camps or for participation in sports competitions and in sports classes organised by associations or foundations.
The intended source of additional tax revenue is tax rate increase on tobacco products, e-liquids, tobacco substitute products, alcoholic beverages, gambling, and fuel used in special economic zones and free ports.
In addition, to ensure the tax revenue needed for funding priority activities, the Saeima has decided that credit institutions and providers of loan services will have to pay a 20 % surcharge on corporate income tax every year.
The Law on the State Budget for 2024 and the Budget Framework for 2024, 2025, and 2026 will enter into force on 1 January next year.
Saeima Press Service