Production of electricity
The Latvian tax system has not generally changed, but from time to time the government decides on changes in some taxes when drafting next year’s budget. In order to end this practice, the government has resolved to prepare and introduce a new tax policy – transfer the tax burden from laborforce to capital.
In 2015 the power market was liberalized for households in Latvia, allowing new players to show up and present competitive offers to customers. In April 2017 liberalization of the natural gas market will take place, providing for the end of JSC Latvijas Gāze natural gas utility’s monopoly rights and opening of the market.
2016 was not the most successful year for Latvia’s economy, mostly due to uncertainty in external markets. Even though at the beginning of the year Latvia’s growth figures were projected at around 3%, in reality Latvia’s GDP increased by only 1.6% last year.
The gradual opening of the electric energy market in Latvia has finally led to a sense of competition and future potential.
With the domestic consumption decrease, export came to be considered the key opportunity for Latvian industry. This since 2009-2010. Manufacturing volume grew 16,8% in 2012, while the growth in export was 43%.
Estonia is considered one of the most successful examples of fiscal policy and of how to manage the development of a small economy.
Competition on the electricity market is developing very slowly legislative and political battles delay the implementation of green energy.
Latvia has historical roots of processing industry; however, significant changes have taken place during the last twenty years.