ASSESSMENT OF AGRICULTURAL TAX BURDEN IN LATVIA

No preferential tax regime for agriculture is imposed in Latvia. Farmers pay the same taxes as entities from other economic sectors; though, tax reliefs are applied to substantially reduce tax payments made by farmers to the budget. Therefore, the tax burden in agricultural sector is significantly lower than the general tax burden in Latvia. Nevertheless, it increases faster irrespective of many tax reliefs. The research aim is to study the dynamics and structure of tax payments in agriculture of Latvia to identify factors promoting the increase of tax burden. Result of the research concluded that the tax burden in agriculture grows at expense of production or production prime costs impacting taxes, while the capital tax burden decreases in the recent years. The planned inclusion of subsidies into the taxable income will increase budget revenues from capital taxes; thus, allowing to decrease labour taxes further leaving an impact on the prime cost of agricultural produce and enhancing the competitiveness of agricultural products produced by Latvia's farmers.