by Kristina Tolordava
Does taxes matter for Latvians? Interesting question and assumingly many Latvians may be curious to find out the answer on it. If it is so, then this article will shed the light on it and try to draw the overall picture within the limits of available data.
In fact, previously there were no reflections on this topic and largely it was free for speculations what are the attitudes of Latvian people regarding the tax policy in relation to multinational companies’ and, in general, global tax policy. In a very appropriate time, a large-scale poll was carried out in Latvia and other 15 European countries. According to the poll conducted by a leading European polling agency between 25 September 7 October in 2015, at least, 1000 adults have been interviewed. This poll consists six questions and has the answers ranging from strongly agree with strongly disagree and do not know option and neutral. The age starts from 18 and above 55.
The second question, which may arise, why in Latvia and/or why in other European countries. Well, if you don’t know yet the very good answer on it then I will remind you to those who know and announce for those for whom it comes as a surprise that Latvia is a member of the first massive pan-European project involving 15 European countries and three southern members (there was no such a survey in southern members yet).
A further question would be what it is about this project.
At the center of this project is the problem of tax dodging that costs developing countries $160bn a year and 1 trillion Euros for EU. We need changes at a national, regional and international level to eliminate the structural causes of global poverty, inequality and unequal development. The tax Justice Together project is funded by the European Union and brings together 24 NGOs from 19 countries including (16 EU countries).The project exists to implement exciting and innovative campaigning in order to help European citizens link their experience of austerity and inequality to the tax justice agenda. It is an ambitious, large-scale project promoting progressive tax reform trough public campaigning and advocacy.
In short, this project aims to make changes in the global tax system and Latvia will be a part of those changes along with its partners.
Before we reach the results collected in Latvia, l would suggest having a quick look at the overall picture of baseline poll:
The main points of Pan-European data from 16 European countries (Ireland, UK, Denmark, the Netherlands, Spain, Czech Republic, Germany, Sweden, France, Poland, Bulgaria, Belgium, Hungary, Slovenia, and Latvia)looks as follows:
- 77% of people across Europe agree the law needs to change so that companies and wealthy individuals cannot use tax havens to reduce the amount of tax they pay [in the country being polled]
- Half of people across Europe disagree that that current law is doing a good job of ensuring that large international companies pay their taxes around the world
- More than half of people across Europe (54%) agree that public services in poor countries suffer due to the tax arrangements of large international companies
- Half of people across Europe believe the tax practices of large international companies (using places with low tax) has an impact on the gap in wealth between rich and poor countries
- Over half of the people across Europe (56%) think poorer countries would have more money to fight poverty if we changed the global rules on tax
Latvians Attitude Towards Global Tax Policy
Now it is time to disclose the specific features of the survey’s results in Latvia. Here, you may see what average Latvian thinks about the topics like the tax system, multinationals, tax havens, the impact of the tax system on the developing world etc.
The answers on the first statement regarding 1.Multinational companies’ ability to do anything they can to reduce the amount of tax they pay as long as they are not breaking the law are indeed very interesting. Here, it seems that the age apparently matters, as older people tend to disagree more strongly with the established system that allows Multinationals’ to reduce paying taxes in their countries. From the data, it is clear, that the elder respondent (above 45 and 55) finds this statement less acceptable and overall they make up 80%, whereas a considerable amount of youngsters think that it is fine for Multinational Companies to use any means as long as they do not break the law. Interestingly in the center of Latvia, the population also tends to disagree with the current tax policy.
When it comes to the 2.satisfaction by the current law, aka it is doing a good job of ensuring that large international companies pay the tax they are due around the world. Here, we find slight gender disparities in relation to this statement, where 32% of males are less contented with the efficiency of the current law and while only 26% of females tend to show the same sentiments. It can be seen in the East part (22%) of Latvia that people’s concern with the subject is relatively low than in other parts of Latvia.
While approaching a very important question about 3.the necessity of the changes in the law, which would disable multinationals’ and other rich individuals’ use of ‘Tax Havens’, we find very positive results, specifically, the majority of Latvians (73%) agree with that. More precisely, the table indicates that 41% of Latvians strongly agree with this statement and one-third of them tend to agree too, which in total reaches 73%. What is particularly interesting, only 10% of respondents disagreed on it. Concerning this statement, 82% of people elder than 55 agree on that and the percentage among this age group outnumbers the other age groups. A vast percentage of interviewers from the north of Latvia (81%) have been exceedingly positive about the statement and agreed that the changes are needed to be brought on the agenda.
Slightly more than half of respondents agree that 4.Public services like schools and hospitals in poor countries suffer due to the tax arrangements of large international companies while only 17% disagrees with, 19% being neutral and 11% of lacking knowledge regarding the subject. At the same time looking at the age groups, again, people elder than 55 seem to be largely agreeing with this statement. In addition, in the center of Latvia, 60% of population positively feels about the statement.
The highest percentage (40%) among different age groups who disagree with the following statement 5.that the tax practices of large international companies – utilizing places with low or very low tax – has no impact on the gap in wealth between rich and poor countries are people above age 55. In addition, in the south, center and west of Latvia people show a relatively higher figure in this matter.
More than half of respondents agree with the following statement: 6.poorer countries would have more money to fight and reduce poverty if we changed the global rules on tax, which is quite illustrative in terms of attitudes of the population. In East, north, south and west parts of Latvia we have similar 65%/64 percentage figure showing the agreement with this statement. Interestingly women and men both showed the same sentiments in regards to it and reached 60%.
To sum up, a positive trend that one could observe while looking at the results of the poll is that majority of the population of Latvia tend to show concern over the existed global tax policy. Most importantly, the majority of Latvians find necessity in changing the global tax system. Based on that, we may conclude that the result of the poll is a step forward in tackling the issue of global tax policy in a local level, but also, we should not forget that inequality starts and flourishes where there is a lack of empathy. On a positive note, Latvians tend to show the empathy towards Developing World that is badly affected by the global tax system and to a great degree the developed world as well. At the end, comes the very legitimate thought: ‘what can I do to change it’? Firstly, ask questions, search for the answers and follow the news about it, as there is always a possibility for every individual to be a part of big changes. The outcome of the poll suggests thinking that Latvians want to be a part of global changes.
The contents of this press release are the sole responsibility of Latvian Platform for Development Cooperation and can in no way be taken to reflect the views of the European Union.