The Republic of Latvia
Statistical Appendix
Author:
International Monetary Fund
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Publication Date:
25 Jan 2002
eISBN:
9781451824506
Language:
English
Keywords:
ISCR; CR; Latvia; budget; budget institution; commercial bank; return on equity; banking system; tax Arrears; US$ unit Labor; enterprise deposit
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In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.

Abstract

In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.

Table 1.

Latvia: Savings-Investment Balance, 1996–2000

(In percent of GDP)

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Sources: Latvian authorities; and Fund staff estimates.

External current account deficit.

Government revenues do not include privatization receipts.

Including net lending.

Table 2.

Latvia: Gross Domestic Product by Sector of Economic Activity at Current Prices, 1992–2000

(In thousands of current lats)

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Source: Central Statistical Bureau of Latvia.

For 1990-94 includes forestry, logging, and related services.

Table 3.

Latvia: Gross Domestic Product by Sector of Economic Activity at Current Prices, 1992–2000

(In percent of GDP)

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Source: Central Statistical Bureau of Latvia.

For 1990–94 includes forestry, logging, and related services.

Table 4.

Latvia: Gross Domestic Product by Sector of Economic Activity at Constant Prices, 1992–2000

(In thousands of 1995 lats)

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Source: Central Statistical Bureau of Latvia.

For 1990–1994 includes forestry, logging, and related services.

Table 5.

Latvia: Gross Domestic Product by Sector of Economic Activity at Constant Prices, 1992–2000

(Percentage growth)

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Source: Central Statistical Bureau of Latvia.

For 1990–1994 includes forestry, logging, and related services.

Table 6.

Latvia: Gross Domestic Product by Expenditure at Current Prices, 1996–2000

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Source: Central Statistical Bureau of Latvia.
Table 7.

Latvia: Gross Domestic Product by Expenditure at Constant Prices, 1996–2000

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Source: Central Statistical Bureau of Latvia.
Table 8.

Latvia: Energy Balance Overview, 1996–2000

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Source: Latvian authorities.
Table 9.

Latvia: Energy Balance in 2000

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Source: Statistical Yearbook of Latvia.

Including oil shale.

Production is electricity produced by using hydro and wind power.

Table 10.

Latvia: Labor Market Indicators, 1996–2001

(In thousands)

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Source: Central Statistical Burean of Latvia

End of the period.

Persons unemployed for six months or more, starting in 1998.

Average number of recipients.

Defined as the full time work equivalent of working time that is reported lost due to enforced reduced hours and unpaid leave.

Beginning of year data; since 1998, average quarterly.

Average quarterly.

Table 11.

Latvia: Employment and Unemployment Changes, 1997–2000

(In percent of labor force, except where noted)

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Source: Central Statistical Bureau of Latvia.
Table 12.

Latvia: Labor Force Survey Results, 1996–2000

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Source: Central Statistical Bureau of Latvia, "Labor in Latvia: Labor Force Survey Data," various issues.

In 1995, age 15 to 69. Since 1996, age 15 and older.

Unemployed who have given up seeking a job, and are therefore not counted as jobseekers.

Table 13.

Latvia: Average Employment by Sector of Economic Activity, 1991–2000

(In thousands)

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Sources: Central Statistical Bureau of Latvia.
Table 14.

Latvia: Share of Employment by Industry, 1991–2000

(In percent of total employment)

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Sources: Central Statistical Bureau of Latvia.
Table 15.

Latvia: Average Wages, 1996–2001

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Source: Latvian authorities.

The state sector includes enterprises where central or local government capital participation in the company capital is equal to or above 50 percent.

Table 16.

Latvia: Average Gross Wages by Sector of Economic Activity, 1996–2000

(In lats per month)

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Sources: Central Statistical Bureau of Latvia.
Table 17.

Latvia: Consumer Price Inflation, 1996–2001

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Sources: Central Statistical Bureau of Latvia.
Table 18.

Latvia: Summary of General Government Operations, 1996–2000

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Sources: Latvian authorities; and Fund staff estimates.
Table 19.

Latvia: Operations of the Central Government and Social Fund, 1996–2000

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Sources: Latvian authorities and Fund staff estimates.
Table 20.

Latvia: Local Government Operations, 1996–2000 1/

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Sources: Latvian authorities and Fund staff estimates.

For 1997–2000 includes special funds of local governments.

Table 21.

Latvia: General Government Consolidated Budget Expenditure by Function. 1996–2000 1/

(In thousands of lab)

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Source: Latvian State Treasury and Latvian Central Statistics Office.

Data for 1999 and 2000 are not consolidated. Data are not fully comparable with Tables 18-20, due to different methods of consolidation.

Table 22.

Latvia: General Government Budget Tax Arrears. 1996–2001

(In millions of lats)

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Source: Ministry of Finance.

Arrears include some claims that are unlikely to be collected. Actual arrears refer to those that are likely to be collected

Table 23.

Latvia: Employment and Wages in Budget Organizations, 1996–2000

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Source: Latvian Central Statistical Bureau
Table 24.

Latvia: Government Securities Auctions, 1996–2001

(In millions of lats, at face value)

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Sources: Latvian authorities; and Fund staff estimates.

Dates refer to those of auctions rather than settlements

Table 25.

Latvia: Pension System, 1996–2000 1/

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Sources: Ministry of Welfare; and Fund staff estimates.

First pillar (PAYG) only.

Table 26.

Latvia: Family Benefits, 1996–2000

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Sources: Ministry of Welfare; and Fund staff estimates.

Monthly average number of paid maternity days, in thousands.

Table 27.

Latvia: Reserve Money and Net Domestic Assets of the Bank of Latvia, 1996–2001

(in millions of lats)

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Sources: Bank of Latvia; and staff estimates.

New accounting charts became effective in June 1997, leading to a break in the series.

Valued at current exchange rates.

As the Bank of Latvia has almost no medium- and long-term foreign currency liabilities, NFA largely equals NIR.

Includes purchase of government securities and change in government deposits

Table 28.

Latvia: Broad Money and Net Domestic Assets of the Banking System, 1996–2001

(in millions of lats)

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Sources: Bank of Latvia; and Fund staff estimates.

New accounting charts became effective in June 1997, leading to a break in the series.

As of June 1997, residents’ foreign currency deposits are deposits in all currencies except lats.

Up to end-June 2000, NFA of commercial banks include equity in Latvian commercial banks that is owned by non-residents; thereafter, such equity is treated like domestic capital and captured in “other items, net”. As of end-October 2001, this equity amounts to LVL 154 million.

In currencies of OECD countries, valued at the current exchange rates.

Table 29.

Latvia: Enterprise and Household Deposits, 1996–2001

(In millions of lats)

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Sources: Bank of Latvia.
Table 30.

Latvia: Enterprise and Household Credits, 1996–2001

(In millions of Lats)

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Source: Bank of Latvia.
Table 31.

Latvia: Sectoral, Currency, and Maturity Distribution of Credit, 1996–2001

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Source: Bank of Latvia.
Table 32.

Latvia: Banking System Indicators, 1997–2001

(In millions of lats)

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Source: Bank of Latvia.

Computed on the basis of the net asset position of the government.

Until October 1999, Riga Commercial Bank.

Former Latvian investment Bank (excluded from other credit institutions until end 1997).

Table 33.

Latvia: Structure of the Financial System, 1997–2000

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Source: Financial and Capital Markets Commission (FCMC).
Table 34.

Latvia: Selected Financial Sector Indicators, 1996–2001

(In percent, unless otherwise indicated)

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Source: Bank of Latvia; and Financial and Capital Markets commission (FCMC).

End-December values based on audited financial statements; otherwise, as reported by banks.

The liquidity ratio is defined as: (cash + claims on the central bank + claims on other credit institutions + fixed-income government bonds - liabilities to the central bank - liabilities to other credit institutions)/deposits.

Return on equity is defined as the ratio of the value of bank-issued equity to profits.

GDP is calculated using annualized quarterly data.

Commercial bank lending-deposit spreads for 3-month average of 3–6 months’ maturities.

Dow Jones Riga stock exchange index, end-of-period data.

Table 35.

Latvia: External Debt and Assets, 1996–2001 1/

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Source: Bank of Latvia, Ministry of Finance, DataStream and Staff estimates.

From Latvia‧s International Investment Position. Trust funds are excluded in 2000 and 2001.

Including an estimate of long-term debt in the International Investment Position maturing within a year. Excluding IMF.

Including government guaranties.

Time deposits, which are recorded as short-term loans since 2001 in the International Investment Position, are also excluded.

S&P.

End-of-period spread of 5-year Eurobond issued in May 1999 above the rate on German Euro-denominated bond maturing July 15, 2004

Table 36.

Latvia: Balance of Payments, 1996–2000

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Sources: Bank of Latvia; and staff estimates.

In 1996–98, official travel exports data have been increased by 30 percent based on IMF technical assistance advice.

Table 37.

Latvia: Exports and Imports by Area and Country, 1996–2000

(In percent of total unless otherwise indicated)

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Source: Latvian authorities.
Table 38.

Latvia: Foreign Trade by Free Trade Agreement Countries, 1996–2000

(In thousands of lats)

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Source: Central Statistical Bureau of Latvia.
Table 39.

Latvia: Commodity Structure of Foreign Trade, 1996–2000

(In percent of total)

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Source: Latvian authorities.
Table 40.

Latvia: Oil- and Gas-related Exports and Imports of Goods and Non-factor Services Values, 1997–2001

(In million of lats, unless otherwise indicated)

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Source: Latvian authorities

By pipeline, railways, and ships.

Table 41.

Latvia: Oil- and Gas-related Exports and Imports of Goods and Non-factor Services Volumes, 1997–2001

(Thousand of tonnes, unless otherwise specified)

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Source: Latvian authorities

In millions of m3; from 2000, in TJ.

Table 42.

Latvia: Manufacturing Real Output Production, Employment, and Wages, 1996–2001

(Year-on-year percentage change)

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Sources: Latvian authorities; and Fund staff estimates.

Defined as real output per employee

Defined as average gross wage over labor productivity expressed in US$ terms.

From IMF database with trade weights calculated by Staff.

Defined as Latvian unit labor costs over unit lab or costs in advanced economy trading partners.

Table 43.

Latvia; Real and Nominal Effective Exchange Rates, 1996–2001

(index 1997 = 100, period average) 1/

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Sources: IMF International Financial Statistics and Direction of Trade Statistics

Period average. An increase in the index corresponds to an appreciation of the lats.

Trade weights reflect the average share of both export and import 1996–2000.

Table 44.

Latvia: Accumulated Foreign Direct Investment by Country of Origin, 1996–2000

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Source: Investment in Latvia, Quarterly Bulletin, Central Statistical Bureau of Latvia.
Table 45.

Latvia: Accumulated Foregin Direct Investment by Kind of Activity,1996–2000

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Source: Investment in latvia, Quarterly Bulletin, Central Statistical Bureau of Latvia

APPENDIX I

I. Tax Summary

(as of October 1, 2001)

A. Taxes on Income and Property

The Corporate Income Tax
Nature of the tax

1. The Law on the Corporate Income Tax replaced the Law on the Profit Tax effective April 1, 1995. Together with the Law on the Personal Income Tax, the law forms a unified system of taxation on all types of income in Latvia unless otherwise stipulated by acts of legislation. The tax applies both to residents and permanent establishments of nonresidents. Taxable income is defined as the annual profit (loss) as determined in the profit and loss statement under the Law on Annual Reports of Enterprises or the Law on Credit Institutions or the Law on Insurance Companies and their Supervision, adjusted according to provisions of the Law. The annual depreciation amount for fixed assets is set at twice the depreciation rate under the law (rates between 5 percent and 35 percent) multiplied by the remaining balance. Tax losses can be carried forward for five years. The thin capitalization rules limit the amount of interest payments that can be deducted in any year, and the transfer pricing rule is applied to cross-border transactions between Latvian residents and nonresidents. Amendments to the enterprise income tax law were introduced in 1997, allowing the transfer of losses between members of an enterprise group. By the later amendments the period for carry forward of losses is set at twice of standard period for enterprises that are registered and operating in a specially supportable region (since 1998), and for enterprises that are engaged in oil research and extraction works (since 2000).

Tax rates

2. The standard tax rate is 25 percent (22 percent from January 1, 2002). There are withholding rates of 5–25 percent on income paid to non-residents including the rate of 10 percent that is applying to interest payments in the case when the payer and recipient are associate enterprises, and dividends. Tax credits apply to charitable deductions, small enterprises, enterprises that use prisoner labor, income from agricultural activity, enterprises producing high technology products and software and on tax paid in foreign countries. Small enterprises are defined as those satisfying requirements on the value of fixed assets, net turnover, or the number of employees.

Tax exemptions

3. Exempt entities include nonprofit organizations and enterprises run by associations for the handicapped, charities, and health-care foundations. Amendments to the Law On Foreign Investments in the Republic of Latvia introduced in 1995 abolish the tax holidays for enterprises with foreign capital.

The Personal Income Tax (PIT)
Nature of the tax

4. The personal income tax is assessed on salary, income from self-employment, pension, property income, as well as on all other remuneration, bonuses, compensation for unused vacation time, and all other kinds of payments which have not been exempted from the income tax. Tax levied on salaries and wages is withheld at source. Taxpayers must file an annual income return by April 1 of the year following the taxation year. Individuals whose only income is employment income and from whom income tax is withheld do not submit returns.

Tax rates

5. The tax rate is 25 percent of taxable income.

Exemptions and deductions

6. The income tax is imposed on taxpayers income for the taxation (calendar) year, except for nontaxable activities. The following are deducted from taxpayer income: (a) a nontaxable minimum (LVL 21/month effective January 1, 1997), (b) a deduction for each dependent (LVL 10.50/month effective January 1, 1997); (c) state social insurance contributions; (d) contributions into private pension funds not exceeding 10 percent from the persons annual taxable income; (e) expenses for the education and health care of the taxpayer or family members; (f) donations to charity; and (g) benefits for handicapped or politically repressed persons or members of the movement of national opposition.

7. Income tax is not assessed on: agricultural income of individual farmers if it does not exceed LVL 3,000; dividends or business profits subject to the Corporate Income Tax; interest income; social benefits from the budget including unemployment compensation and social maintenance, except for temporary disability payments; scholarships; child support; alimony; compensation for damages for disability caused by the bodily injury or due to other health harm, as well as for loss of supporter; insurance compensation and payments; income from the sale of private property.

Social Insurance Contributions
Nature of the tax

8. The social insurance contribution is imposed on salaries, wages, fees, royalties and other remuneration and rewards for work.

Tax rates

9. According to the provisions of the Law On State Social Insurance the tax rate is 35 percent plus 0.09 percent from taxable object, starting with January 1, 2001. The tax rate of 33 percent will be introduced in 2003.

10. The proportions to be paid by an employer and an employee since 2001 is 26.09 : 9, with the exception that the rate for insurance against work injuries and occupational diseases can change every year.

Exemptions

11. The social insurance contribution is not assessed on: income from property, dividends, interest payments, royalties, and other income not related to employment.

Real Estate Tax
Nature of the tax

12. The law On Real Estate Tax replaced the law On Land Tax in 1998 and the law On Property Tax in 2000. The tax is paid directly to the respective village, town or city budget.

Tax rates

13. The real estate tax is 1 percent of the cadastral value of real estate. During the transition period, the tax rate will be 1.5 percent of land value and book value or inventory value for buildings and constructions.

Exemptions and deductions
Exemptions

14. The following are exempt from the real estate tax:

  • real estate owned by local government located in its administrative territory and used by the local government or its institutions or financed by the budget of local authority;

  • real estate owned by foreign countries and used as diplomatic and consular representatives on the basis of reciprocity;

  • public roads, streets, air and water navigation buildings, public waters;

  • real estate owned by religious organization and used for religious purposes;

  • land on which an economic activity has been prohibited;

  • historical buildings and monuments of Latvian culture and land for their maintenance, except dwelling houses and land for their maintenance, as well as real estate used for economic activities;

  • land which is occupied by newly planted forest;

  • land on which an economic activity has been prohibited;

  • public recreation centers, sports grounds and buildings as well as land under them;

  • individual dwelling houses and privately owned apartment in an apartment houses if they are not commercially used up to December 31, 2003;

  • buildings in cemeteries, funeral constructions, crematorium and land for their maintenance;

  • real estate that is indictable to the central or local government and which is not assigned for application or rent;

  • Until December 31, 2002 the following buildings and constructions are exempt:

  • not used for an economic activities;

  • post and telecommunication offices in rural areas;

  • communication lines, local pipelines and cables;

  • dwelling-houses or their parts which are rented or used for living;

  • Until December 31, 2003 the following buildings and constructions are exempt:

  • those used only for agricultural activities;

  • those maintained from the budgetary resources;

  • those used for the purpose of health service (care), sports, educational and cultural needs;

  • those used for the purpose of environmental protection;

  • those owned by public organizations and their enterprises according to the list of organizations approved by the Parliament;

Local governments may reduce the tax for the certain groups of taxpayers in accordance with their own judgments.

15. The law provides tax relief of 50% for politically repressed persons who own or possess land and individual dwelling houses at least for 5 years and do not use them for economic activities. Tax relief is provided for special economic zones enterprises in the special economic zones.

The Property tax has been abolished.

B. Taxes on Goods and Services

Value-Added Tax
Nature of the tax

16. This is a tax on value added, which uses the credit system and is levied on goods and services at the manufacturing/import, wholesale, and retail stages. The new law became effective on May 1, 1995 and replaced the old Turnover Tax Law, which had been administered as a VAT.

Tax rates

17. The standard tax rate is 18 percent of the taxable value of supplies of goods, provision of services, and import supplies. A tax rate of zero applies to exports, international transportation and services connected with export supplies of goods and international transportation.

Exemptions

18. The VAT is not charged on: educational services; school books, scientific literature, and certain Latvian language literature; public library services; scientific research; services of nursing homes, fee for children attending pre-school institutions; banking, financial and insurance services; betting, lotteries and other types of gambling; registered mass media; used real estate sales and apartment rent payments by individuals; movies (except video), visits to theatres, concerts, museums, exhibitions, cultural and sporting events, etc.; certain approved medical goods supplies and services; certain approved baby-foods; funerals and religious services; foreign non-refundable shipments of technical aid; consular services; certain services provided by agricultural companies to fanners; fire-fighting services; supplies of imported goods not subject to customs duties; certain approved fixed assets; catering in penitentiaries; post offices services; tuition for unemployed persons professional training organized by the State Employment Service; sales of land; works of art brought in to supplement museum reserves; school students transportation financed from the municipality budgets.

Excise tax
Nature of the tax

19. Tax is paid when excise goods are imported into the customs territory of the Republic of Latvia for release in free circulation or when excise goods are taken out from the excise goods warehouse for consumption on the internal market. The tax for excise goods that are marked with excise tax stamps (alcoholic drinks and cigarettes) are paid for received tax stamps.

20. Taxpayers are importers of excise goods and keepers of excise tax warehouses. An excise goods warehouse is a territory where it is allowed to produce, store, process, receive and consign excise goods applying suspended tax payment procedure. Suspended tax payment procedure for alcoholic beverages, tobacco products and mineral oils may be applied only when a guarantee is submitted.

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Exemptions

Excise tax is not imposed on following goods:

1. Alcoholic beverages:

  • denatured alcoholic beverages;

  • alcoholic beverages used for the determination of alcoholic drink quality;

  • alcoholic beverages lost due to unsurpassable forces;

  • alcohol for the needs of medicine, veterinary medicine, pharmaceutical industry and research works;

  • wine, fermented drinks or beer produced by a natural person for self-consumption;

  • alcoholic beverages imported by natural person for personal consumption:

  • 1) up to 2 liters of still wine,

  • 2) up to 2 liters of intermediate products, fermented products, sparkling wine or up to 1 liter of other alcoholic beverages,

  • 3) up to 5 liters of beer.

2. Tobacco products:

  • denatured tobacco products;

  • tobacco products used for the determination of tobacco article quality;

  • losses caused by unsurpassable forces;

  • tobacco products imported by natural person for personal consumption:

  • 1) up to 200 cigarettes,

  • 2) up to 20 cigars or cigarillos,

  • 3) up to 200 grams of smoking tobacco.

3. Mineral oils:

  • mineral oils, which are used for the supply of air traffic means and sea transport

  • mineral oils that are used as raw material in the technological process of production

  • oil gases and other gaseous hydrocarbons that are used as heating or are used in gas ovens and other equipment (other than fuel)

  • for producers of agricultural products the excise tax shall be refunded, calculating 100 liters of gas oil for a calendar year per each hectare of land used for agricultural purposes

  • excise tax on heavy fuel oil shall be refunded to the legal persons using heavy fuel oil as a heating fuel

4. Other excise goods:

  • cars and motorcycles older then 25 years

  • cars and motorcycles which are exempted from custom tax and value added tax

  • cars with electrical engine

  • special cars (ambulance cars, caravans, hearses)

  • soft drinks and coffee used for the determination of quality of soft drinks and coffee

  • losses of soft drinks and coffee caused by unsurpassable forces

  • up to 12 liters of soft drinks imported by natural person for personal consumption

  • up to 1 kilogram of coffee imported by natural person for personal consumption

  • soft drinks made by natural person for self-consumption

  • non-packaged beverages which are prepared at a public catering undertaking for consumption at this public catering.

C. Other Taxes

Tax on Natural Resources
Nature of the Tax

21. The current version of the law, “The Tax on Natural Resources” became effective on January 1, 1996. The tax is paid by all natural and legal persons who obtain natural resources in the territory of Latvia (or continental shelf), or pollute the environment, or sell self-produced or imported goods that are dangerous to the environment. In the latter case, a permit is required for such activities.

22. The tax on acquisition of natural resources and environmental pollution is calculated on a per unit basis for each unit of natural resources or pollutant. For imports of goods dangerous to the environment, the tax is calculated in lats and levied per unit or as a percentage of the total value at customs including an import duty if applicable. The tax on the sale of self-produced goods dangerous to the environment is calculated in lats and levied per unit or as a percentage of the selling price, net of excise tax and VAT.

23. The tax on natural resources is paid into a special state budget of environmental protection and into special local government budgets of environmental protection in the territory from where the resource originates.

Appendix II

Latvia: Summary Overview of the Trade System, 2001

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Sources: Information supplied by the authorities.

Appendix III

Latvia: Status of the Negotiations Related to the Chapters under the EU Acquis Communautaire (As of December 12, 2001)

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Source: Uniting Europe Weekly Bulletin.

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Cover IMF Staff Country Reports
The Republic of Latvia: Statistical Appendix
Author:
International Monetary Fund
Volume/Issue:
Volume 2002: Issue 011
Publisher:
International Monetary Fund
ISBN:
9781451824506
ISSN:
1934-7685
Pages:
60
DOI:
https://doi.org/10.5089/9781451824506.002