Published on 28 September 2026, the Tvnet.lv interview featuring Jānis Taukačs discusses the Latvian government’s latest initiative to bring informal micro-entrepreneurs operating in forests, garages, and homes into the formal tax net via the Micro-Enterprise Tax (MET) regime. The article examines the policy rationale, the simplified tax calculation mechanics, and the compliance obligations for newly registered micro-enterprises. It highlights the balance between encouraging formalization and avoiding excessive administrative burden for low-income self-employed individuals.
Key Takeaways
- Expanded MET Eligibility & Simplified Reporting: The reform lowers the entry threshold and streamlines registration for individuals providing services such as woodworking, auto repair, tutoring, and home-based crafts. The MET replaces multiple taxes (CIT, PIT, social contributions) with a single turnover-based tax rate (currently 9% on revenue up to €60,000 annually), with no requirement for double-entry bookkeeping.
- Enforcement & Incentives: The State Revenue Service will use data analytics, cross-referencing with e-commerce platforms, advertising portals, and municipal permits to identify undeclared activity. Voluntary registration before a detection audit grants a one-year grace period for past liabilities. However, persistent non-compliance may trigger full-scale tax audits and penalties.
- Social Protection & Transition: MET participants gain access to statutory social insurance (pension, sickness, maternity) previously unavailable to informal workers. The article details the transition rules for those exceeding the €60,000 turnover threshold, requiring migration to the general CIT/PIT regime with credit for MET payments made.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement