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Krīzes un 2009. gada nodokļu politikas izmaiņu ietekme uz Latvijas ekonomiku
[Influence of the Crisis and 2009 Tax Policy Changes on the Latvian Economy]

  • Skribans, Valerijs

The paper discusses the influence of the global economic crisis on the Latvian economy. Using the system dynamics approach and models produced beforehand, various development scenarios of tax policy, householder crediting, and the job market are analyzed. Produced models allow to obtain effective change data in line with new development tendencies to check various hypotheses. Model results show that an increase of the rate of the value added tax (VAT) will cause not only the increase of VAT volume but also, by way of feedback, a decline in consumption. The VAT and excise tax volumes planned in the beginning will diminish in case of declining consumption. The VAT rate increase will allow for a short-time increase in income from taxes, but it will not have a protracted effect. A similar situation is with the excise tax. The reduction of the income tax rate diminishes the volume of income tax and, simultaneously, fosters consumption, which in turn causes VAT, excise and income taxes to increase again. 30% cuts of salaries will impede householders to pay their credits and the interest rates without reducing their other expenditures. Nevertheless, such a large salary cut is unreal. Migration of labour force will introduce the average salary slightly below that of the salary minimum in the more developed European states into the Latvian labour market.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 19141.

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Date of creation: 2009
Date of revision:
Handle: RePEc:pra:mprapa:19141
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  1. Skribans, Valerijs, 2007. "Ekonomisko un vadības profesiju darba apmaksas tirgus konjuktūra Latvijā
    [Salary conjuncture of economic and management professions experts in Latvia]
    ," MPRA Paper 16384, University Library of Munich, Germany.
  2. Skribans, Valerijs, 2009. "Modelling crediting volume by using the system dynamic method," MPRA Paper 16353, University Library of Munich, Germany.
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