중동부유럽

Latvia's Ministry of Finance requested the World Bank to collaborate on a review of the country's tax system as input for the design a medium-term tax strategy. The motivation behind the tax review is to find options to increase tax revenues by three percentage points of GDP to reach a target tax-to-GDP ratio of 33 percent in the medium term. In Latvia, tax revenues are lower than predicted for its income level and institutional development. The additional revenues would be used to cover growing spending needs in the following areas: Defense pending. The Government aims to increase defense spending to the NATO guideline target of 2 percent of GDP by 2018 (from 1 percent of GDP in 2015 and an estimated 1.5 percent of GDP in 2016). Investment in human capital. Health, education and social protection are additional areas that the Government has identified as requiring further investments. In particular, public health spending is low and health outcomes are lagging compared with much of the European Union (EU).