(...) When the first “Turība” Business Index study, which surveys 750 Latvian companies, was published in 2018, a major tax reform had taken place, resulting in changes to several taxes simultaneously. Positive changes include the non-taxation of reinvested profit for corporate income tax, but in reality, the tax rate increased significantly by 10 percentage points.

Personal income tax rates also changed significantly; that is, several rates with quite complex application methodologies began to incorporate a differentiated non-taxable minimum. In turn, the tax reform that came into effect in 2021 was aimed at changes in the application of social contributions and the restriction of small businesses. Even though small and medium-sized enterprises are the foundation of our country’s economy, the tax system should support them and encourage citizens to actively become entrepreneurs, rather than creating obstacles for them.