OREANDA-NEWS.  June 17, 2014. In case a certain tax rate were in Latvia were increased to the level that companies would no longer be able to pay, 70% of respondents would lay off their employees and wind up their businesses, come up with tax efficiency schemes or relocate their companies abroad, suggests a poll conducted by Citadele Index and the market and public opinion research centre SKDS.

The majority of businessmen (30%) said it is difficult to comment what would their companies do if a tax rate in Latvia were increased to the level their company could no longer pay. Conversely, 29% of respondents revealed that they would lay off part or all of their employees and wind up their businesses in such a situation whereas another 22% of respondents said they would try to come up with tax efficiency schemes in order to be able to stay in business. Within this poll 19% of businessmen said they would partly or fully relocate their companies' functions outside of Latvia in such a case.

In terms of sectors, the largest part of respondents representing the manufacturing industry (34%) claimed they would lay off some or all of their employees and discontinue their business. The majority of businessmen from the trade sector (38%) said that it is difficult to tell what they would do in such a situation; another 26% of respondents said they would opt for laying off part or all of their employees. Likewise, the largest part of companies from the construction sector (36%) and services sector (28%) indicated that laying off part or all of their employees and winding up their businesses would be a likely choice of theirs.

In terms of the number of employees, it was difficult to comment the likely measures for micro-enterprises (29%) which employ from 1 to 9 employees, and small companies (32%) with a number of employees ranging from 10 to 49; an almost identical amount, i.e. 29% of micro-enterprises and 28% of small company managers revealed they would be likely to choose to lay off some or all of their employees and wind up their business activity. Conversely, the largest part of medium enterprises (32%) employing 50 to 249 people would try to come up with tax efficiency schemes in order to stay in business, and an identical part of respondents from this group (32%) could not comment what choices they would make. Similarly, the largest part of large enterprises (64%) which employ 250 people and more indicated that it was difficult for them to tell what they would do in such a situation; another 15% of respondents said they would partly or fully relocate their businesses outside of Latvia.

As for exporting and non-exporting companies, the largest part of exporters (35%) would opt for relocating their businesses if taxes increased to unbearable levels whereas another 20% of exporting companies would lay off part or all of their employees and wind up their activity.

In turn, the largest part of non-exporting respondents (32%) claimed they would lay off some or all of their employees and discontinue their business while another 23% of non-exporters said they would relocate their businesses abroad.