Gold Magazine February - March 2013, Issue 23 | Page 83

in 2008 to an estimated 59,000
in 2012. The number of public
administration institutions in
2012 had declined by 53% compared to 2009 and the number
of institutions subordinated to
the ministries had fallen by 34%
compared to 2009.
On the other hand, VAT
was increased substantially from
18% to 21% and social security
contributions went up from 33%
to 35%. In the case of personal
income tax, personal exemptions
were significantly reduced and
various categories of excise tax
were raised. As part of the fiscal
consolidation plan, Latvia introduced capital gains and capital
revenue taxes as well as a new tax
category for company cars used
for private purposes. Structural
reforms were undertaken in the
fields of education and welfare
where the country implemented
prolonged unemployment
benefit payments, increased the
guaranteed minimum income
benefits (that come at the end of
the unemployment benefit period) and put into force temporary work programmes in public
works and other public sectors.
With the reforms undertaken
in public administration, the
government appeared to realize
that for the economy to grow,
the country had to become more
open to business and to simplify
the business creation process.
Finally, EU funds were the key
fiscal stimulus in the crisis years.
The Latvian government tried to
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