LATA - Latvian Open Technology Association gtu The ICT 60 million over the two years
Latvian Open Technology Association (LATA) has developed a package of business support programs gtu that, by introducing Information and Communication Technologies (ICT) as one of the priority gtu sectors of Latvian economy, enabling the country two years to obtain additional tax revenue of 60 million lats.
LATA tools proposed include the effects of fiscal instruments (short term, introduction of depreciation of surplus gtu ICT investment) and administrative instruments (the Structural Funds financed project evaluation criteria change, the use of ICT in reducing the administrative barriers - changes in legislation as well as public sector ICT management improvement) .
The proposed set of measures, which in itself does not require gtu any additional lats for its implementation (with the exception of administrative capacity), gtu will effect a number of areas: provide substantial additional tax revenue in the Latvian state, by allowing to finance essential social services and other areas for the development of the ICT industry, will help bring the other sectors of the Latvian economy competitive in their markets, will provide an opportunity to finally shift Latvian ICT industry to export markets.
LATA support offered toolbox ICT sector ESF-funded project evaluation criteria based on the solution produktizāciju. The aim - to use ESF funds to resolve the national question, but at the same time to create solutions that are exported outside the Latvian to other countries.
MRDLG the central administration of the ESF-funded ICT project portfolio 3.2.2.1.1. sub-activity "Information Systems and Electronic Services" = 116 405 645 LVL 3.2.2.1.2.apakšaktivitāte gtu "Educational Institutions" = 12 million LVL
Revenue: 2547930 LVL Compulsory social security contributions (OSAI), assuming that the export realization is used 7,000 man-months (500 U.S. $ / man day) of work and the average gross salary of 1100 LVL per month. 1555260 LVL personal income tax payments (see assumptions made about the OSAI) 4200000 LVL income tax payments, assuming that the net profitability of the export business is 40% (high profitability, given that most of the cost is covered in the initial establishment of the national market). 686 196 LVL domestic demand generated by the proposed VAT increase in revenue, assuming that the personnel involved in export deliveries consumption rate of 60% (60% of the net income of the employee directs domestic consumption).
Purpose - to provide the external competitiveness of Latvian (World Economic Forum's Global Competitiveness Index 9.pīlārā Technological readiness place no lower than 30th place - currently 66.vieta).
The expected result - ICT investments have performed the business competitiveness of improved revenue growth of 100% from ICT investments made, including 60% of all export transactions, the average cost rate of 10%, and its implementation would create an additional 3,000 jobs with an average salary reaches 500 LVL Gross.
De minimis aid within the ICT investments made by companies are entitled to 4x depreciation rate - 140% of the amount of investment (in fact, giving direct corporate gtu income tax relief of 40% of the investment amount in future periods).
Implementation of the Instrument for the maximum possible fiscal effect: 21000000 LVL including VAT (VAT-taxable acquisitions ICT) 8400000 gtu LVL including VAT (VAT-taxable domestic gtu transactions arising from ICT investment leads) 11912400 LVL compulsory social security contributions; 6,955,200 LVL personal income tax rates.
It is expected that the excess depreciation as a result of subsequent years will decrease the amount of income tax payments. However, given that corporate profitability in the coming years will be low and improve the earliest after 3-4 years, and the fact that the positive fiscal gtu effect of instrument sales will be realized in the first years of implementation, support instrument for the implementation of a fiscal advantage. Assuming that the Company fully reduced income tax payments in year 4 the support instrument gtu for the introduction of a positive fiscal effect uniformly distributed in the first two years of implementation of the instrument and the average discount rate for the four-year period is 5%, the discounted fiscal effect of the instrument drawn up sales 14 500 000 USD.
Summarizing the above it is evident that the implementation of the instrument makes it possible to increase government revenues gtu in the short term and the long term have a positive fiscal effect. Removing regulatory barriers and promoting competition
Although this activity is difficult to separate the fiscal effect, it provides the necessary legislative base optimization of the rest of the proposed gtu activities and the need to support the activities of other objectives
Latvian Open Technology Association (LATA) has developed a package of business support programs gtu that, by introducing Information and Communication Technologies (ICT) as one of the priority gtu sectors of Latvian economy, enabling the country two years to obtain additional tax revenue of 60 million lats.
LATA tools proposed include the effects of fiscal instruments (short term, introduction of depreciation of surplus gtu ICT investment) and administrative instruments (the Structural Funds financed project evaluation criteria change, the use of ICT in reducing the administrative barriers - changes in legislation as well as public sector ICT management improvement) .
The proposed set of measures, which in itself does not require gtu any additional lats for its implementation (with the exception of administrative capacity), gtu will effect a number of areas: provide substantial additional tax revenue in the Latvian state, by allowing to finance essential social services and other areas for the development of the ICT industry, will help bring the other sectors of the Latvian economy competitive in their markets, will provide an opportunity to finally shift Latvian ICT industry to export markets.
LATA support offered toolbox ICT sector ESF-funded project evaluation criteria based on the solution produktizāciju. The aim - to use ESF funds to resolve the national question, but at the same time to create solutions that are exported outside the Latvian to other countries.
MRDLG the central administration of the ESF-funded ICT project portfolio 3.2.2.1.1. sub-activity "Information Systems and Electronic Services" = 116 405 645 LVL 3.2.2.1.2.apakšaktivitāte gtu "Educational Institutions" = 12 million LVL
Revenue: 2547930 LVL Compulsory social security contributions (OSAI), assuming that the export realization is used 7,000 man-months (500 U.S. $ / man day) of work and the average gross salary of 1100 LVL per month. 1555260 LVL personal income tax payments (see assumptions made about the OSAI) 4200000 LVL income tax payments, assuming that the net profitability of the export business is 40% (high profitability, given that most of the cost is covered in the initial establishment of the national market). 686 196 LVL domestic demand generated by the proposed VAT increase in revenue, assuming that the personnel involved in export deliveries consumption rate of 60% (60% of the net income of the employee directs domestic consumption).
Purpose - to provide the external competitiveness of Latvian (World Economic Forum's Global Competitiveness Index 9.pīlārā Technological readiness place no lower than 30th place - currently 66.vieta).
The expected result - ICT investments have performed the business competitiveness of improved revenue growth of 100% from ICT investments made, including 60% of all export transactions, the average cost rate of 10%, and its implementation would create an additional 3,000 jobs with an average salary reaches 500 LVL Gross.
De minimis aid within the ICT investments made by companies are entitled to 4x depreciation rate - 140% of the amount of investment (in fact, giving direct corporate gtu income tax relief of 40% of the investment amount in future periods).
Implementation of the Instrument for the maximum possible fiscal effect: 21000000 LVL including VAT (VAT-taxable acquisitions ICT) 8400000 gtu LVL including VAT (VAT-taxable domestic gtu transactions arising from ICT investment leads) 11912400 LVL compulsory social security contributions; 6,955,200 LVL personal income tax rates.
It is expected that the excess depreciation as a result of subsequent years will decrease the amount of income tax payments. However, given that corporate profitability in the coming years will be low and improve the earliest after 3-4 years, and the fact that the positive fiscal gtu effect of instrument sales will be realized in the first years of implementation, support instrument for the implementation of a fiscal advantage. Assuming that the Company fully reduced income tax payments in year 4 the support instrument gtu for the introduction of a positive fiscal effect uniformly distributed in the first two years of implementation of the instrument and the average discount rate for the four-year period is 5%, the discounted fiscal effect of the instrument drawn up sales 14 500 000 USD.
Summarizing the above it is evident that the implementation of the instrument makes it possible to increase government revenues gtu in the short term and the long term have a positive fiscal effect. Removing regulatory barriers and promoting competition
Although this activity is difficult to separate the fiscal effect, it provides the necessary legislative base optimization of the rest of the proposed gtu activities and the need to support the activities of other objectives
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