IMF calls for Latvian VAT rise
Friday July 17, 2009
Latvia’s prime minister has claimed the International Monetary Fund (IMF) has asked the government to consider raising its rate of VAT.
Valdis Dombrovskis said the issue was raised as the global financial body called for further clarification on measures featured in the country’s budget for next year before it agrees to offer it more funding.
According to Reuters, the VAT rise may be part of a series of conditions created by the IMF, but the central bank has claimed no tax rises will be implemented.
Discussing the issue, the bank’s governor Ilmars Rimsevics told the news agency: "The IMF does not itself dictate to Latvia, or tell Latvia what to do. It wants to see Latvian government action and understand how the 2010 budget will be drawn up."
Plans to up the rate of VAT charged in the UK at the end of this year have raised concerns with retailers, who are worried it could have an adverse effect on sales periods.