The government supports a 4.1 million euro corporate income tax rebate for JSC ‘Latvijas balzams’ for the implementation of a 23 million euro investment project
After more than two weeks of consideration, at today’s Cabinet meeting, the government supported the application of a statutory corporate income tax rebate for the joint-stock company (JSC) ‘Latvijas balzams’ for the implementation of a large investment project. Within the framework of the investment project, JSC ‘Latvijas balzams’ will expand and modernize the historic ‘Latvijas balzams’ manufacturing facilities and warehouses. The project provides for the construction of new facilities as well as the reconstruction of existing buildings.
Evaluating the interests of the Latvian state during the ten-year period, the main benefits for national economy from the implementation of the investment project would be additional exports (+158 million euros), tax payments (+6.4 million euros) and additional purchases from domestic merchants (at least +20 million euros from which 12.6 million euros would go towards construction investments). It should be emphasized that the implementation of the project, along with a significant increase in productivity, would also ensure the preservation of more than 500 existing jobs and a relatively high wage increase.
In the long term, as a result of a total investment of 23 million euros, the company’s competitiveness and export potential will be enhanced by increasing its production capacity and modernizing the production process. It is forecasted that in 2023, the project will result in the company’s export production amounting to 72.5 million euros, which will be 30.4% more than in 2017, when the investment project will be launched.
“In May of this year, we submitted all necessary documents and calculations to the Ministry of Economics in order to apply for a statutory corporate income tax rebate for our planned long-term investment project in accordance with the Law ‘On Corporate Income Tax’. We are pleased that the government has assessed the importance of investment in the Latvian economy and thus clearly demonstrated its support for the big Latvian producers and exporters. We thank the Ministry of Economics for constructive and professional cooperation during the project evaluation and a decision made that confirms that the project complies with the ‘Law on Corporate Income Tax’ for receiving a statutory corporate income tax rebate,” said Intars Geidāns, Chairman of the Board of JSC ‘Latvijas balzams’.
JSC ‘Latvijas balzams’ is one of the largest employers and taxpayers in the country – every year the company contributes around 50 million euros to the state budget via taxes paid and, in the case of the project being accepted, there will be an additional 6.4 million euros paid in taxes during the ten-year period. JSC ‘Latvijas balzams’ is the leading alcoholic beverage producer in the Baltic States, which produces more than 100 different brands of beverages. The products are sold in more than 170 export markets through the ‘SPI Group’, as well as in more than 42 markets by direct export of JSC ‘Latvijas balzams’.