COMPLIANCE OF THE LATVIAN PERSONAL INCOME TAX SYSTEM TO PREAMBLE OF THE SATVERSME (CONSTITUTION) OF THE REPUBLIC OF LATVIA AND INTERNATIONAL OBLIGATIONS OF THE REPUBLIC OF LATVIA

Abstract

Preamble of the Satversme provides that “Latvia is a democratic, socially responsible and national state… solidarity, justice, honesty, work ethic and family are the foundations of a cohesive society.” Preamble of the Satversme is the basis for legal actions by state in order to implement it in real life for improvement of people’s welfare. Latvian personal income tax system discriminates persons with low income and employees in comparision with persons receiving income from capital. The author recommends to reform the existing flat-tax taxation system, to increase tax burden of persons, who receive their income from capital and to resume calculation of the minimum monthly amount of money required to live in Latvia.