OREANDA-NEWS. March 05, 2008. Latvia's competitiveness must not decrease, as compared to Lithuania and Estonia, Prime Minister Ivars Godmanis (Latvia's First Party/Latvia's Way) emphasized in an interview on LNT television's broadcast "900 sekundes".

Godmanis once again severely criticized the idea, proposed by Saeima member Aigars Stokenbergs' non-governmental organization "Sabiedriba citai politikai", that the rich could pay higher taxes.

Godmanis explained that progressive taxes cannot be introduced fast - Stokenbergs may not be aware of the actual situation in Latvia but everyone else is, and Latvia's competitiveness must not be damaged. The capital and labor markets are free, and investors can choose to leave Latvia if they believe that Latvia's tax policy is unfavorable.

According to Godmanis, the government's answer "to a few economists", who call for progressive taxes, will be raising the minimum subsistence level, because it influences incomes of the disadvantaged the most.

Godmanis also said that implementation of the national budget and macroeconomic trends would be analyzed in April. It is possible that the government will then opt for measures stimulating economic development, he said.