Andris Vilks, the Chief Economist at SEB banka in Latvia, the author of the publication mentioned above, is also the Special Advisor to the Prime Minister of Latvia, see here: http://www.mk.gov.lv/en/mp/birojs/?lang=1 .
It is striking to read that Special Advisor to the Prime Minister writes (see Page 6):
The government was not prepared for even greater budgetary expenditure therefore it unexpectedly implemented a considerable rise of consumption taxes. Earlier many experts had suggested similar action at a two‐digit economic growth figure and substantial overhaul and modelling of the entire tax system in search of the best solution, yet at that time neither the Ministry of Finance nor the governments saw any use for this. Now the entire nation has received a shock with unpredictable consequences. The budget will be propped up by the raised taxes, yet, without economic support measures, it can quickly collapse. Clearly, steps are taken to make ends meet on paper. However, they have been so sudden, at such a short notice, without assessing the possible consequences for the public and the business community, if the changes in tax revenues are made over such a short time while the business support measures remain uncertain and bound to be subjected to long and tiresome contemplation of the necessary activities.Who is the real advisor? Minister of Finance?
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