Efficiency of Corporate Income Tax Reliefs for the Investment Promotion in Latvia

Ilmārs Šņucins

Abstract


Corporate income tax rate in Latvia is one of the
lowest in the European Union and is favourable for business.
However, the government additionally uses numerous CIT reliefs
to stimulate investments, to promote specific industries and
investors. Total costs of these tax reliefs are high, but many of the
goals declared by their introduction are not reached, suggesting
that tax relief efficiency could be questioned. The efficiency of the
existing and potential CIT reliefs should be regularly evaluated.
The suggested criteria for such examination are – clear objective,
type of taxable rent, existence of positive externality, appropriate
design and potential for tax planning, costs in revenue foregone,
administrative burden.

Keywords:

tax reliefs, investments, corporate income tax

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DOI: 10.7250/eb.2013.018

Cited-By

1. CORPORATE INCOME TAX REFORM POSSIBILITIES FOR LATVIA
Karlis Ketners, Mara Petersone
Economics and Rural Development  vol: 10  issue: 1  first page: 14  year: 2014  
doi: 10.15544/erd.2014.002

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