Latvia, Детальна інформація

Latvia
Тип документу: Реферат
Сторінок: 9
Предмет: Географія, Геологія
Автор: Маличенко Дмитро
Розмір: 16.8
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Progress has also been made in structural reforms. Prices have been liberalized, the trading has opened, banking institutions have been privatized, as have been a number of small businesses and agricultural land. Latvia also seems to have weathered the banking crisis and the economy has begun to recover late in 1995 and has since experienced some growth in 1996. The banking system has moved towards fairly stable and functioning private banks. Progress has also been made in land restitution and agricultural privatization. Much of the agriculture has already been privatized and the government plans to increase the pace of privatization of state enterprises. Approximately two-thirds of the enterprises owned by government have been privatized. Privatization of large enterprises has been at a slower rate, with only 85 of the 200 proposed projects completed by late 1994.(World Bank). With the approval of laws establishing the Privatization Agency and the State Property Fund, the large enterprise privatization increased its pace in accomplishing the goal of 75% privatization by 1996. (World Bank, 1995).



Latvia is thus in the midst of recovery, assisted by the country's strategic location on the Baltic and its well-educated population.







The Budget System



Under former Soviet rule, public administration and management were highly centralized. Since Latvia's independence in 1991, there has been substantial progress in decentralization of the local governments. Until recently, there were three levels of local government: rural districts and small towns known as pagasts, regions which included rural districts and small towns on their borders known as rayons, and seven major cities, including Riga, which administered both the pagasts and the rayons. Legislation within the past year has simplified the administrative system to two levels ( 26 regions and 600 municipalities) and has clarified and separated responsibilities for expenditure. "New laws provide for a stable and transparent system of revenue assignment, formalizing intergovernmental fiscal relations through allocations of tax revenues between the state and the local governments, and revenue equalization among the municipalities.". (World Bank, 1995).







Extrabudgetary Funds...



Extrabudgetary funds' budgets and operations must be approved by Parliament. The Social Security Fund is the largest of the extrabudgetary funds, accounting for over 28% of general government revenue.(World Bank, 1995). This fund is administered by the Ministry of Finance and financed through the social security tax. Expenditures of the fund include pension payments, sick pay, maternity pay, and family allowance. The unemployment benefits are financed through 1.5% of the social security rate (World Bank, 1995).



Two other significant funds are the State Privatization Fund and the Environmental Protection Fund, which are financed through sales of government property and a natural resource tax respectively. "The State Privatization Fund was established to manage revenues gained from the privatization of state-owned enterprises and the sale of other assets.".(EIU, 1995). Municipalities located within the jurisdiction of the privatization of state-owned property also receive 5% of the revenues. Riga is the only exception to this rule, and receives 10% of the revenue. The Environmental Protection Fund gains revenue through the collection of fines on polluting enterprises and also through a percentage of the natural resource tax. The fund then utilizes the revenue to finance projects which are expected to reduce pollution and protect the environment.







Background of Budgetary Revenues...



During the Soviet era, Latvia was a mainecontributor to the USSR budget, making financial transfers equivalent 20.2% of GDP.(World Bank, 1995). In 1991 those transfers stopped and resulted in a Latvian surplus of 6.4% in GDP for the year(EIU, 1995). However, social outlays continued to increase deficit in 1992 and 1993. The 1993 budget ended the year with a deficit of approximately 2.9% of GDP (EIU, 1995). A new system of taxation was introduced in January 1991, which included a separate profit tax for companies and enterprises. In 1993, the profit tax was levied at a rate of 45% for banking insurance and trade, 35% for state enterprises and state companies, and 25% for all other private companies. Personal income tax came into effect on January 1, 1994, levied at a rate of 25% on the first Lats4.800 and 35% on the remainder of the profit(EIU, 1995). The value-added tax (VAT) was first introduced at a standard rate of 10% in 1992, and was raised from 12% to 18% in November of 1993 on most products excluding food (however the VAT was raised to 18% on food products in March of 1994). The government has also begun to finance the deficit through the issuance of Treasury bills.







Composition of Budgetary Revenues...



Fiscal reform measures which have been implemented since 1990 have changed the structure of budget revenues, becoming similar to the structrue of revenues in Western Europe. Income tax revenues have continued to increase while taxes on enterprises and domestic goods and services have decreased. Social security contributions to total revenue have risen to levels similar to those in Western Europe. New taxes which have been implemented are described below according to World Bank information as of the end of 1995.



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