Integrated Approach to Taxation Optimisation in Latvia

In the first chapter, the issues of tax policy theory, summarising the theoretical aspects of tax evolution and tax application, systematising tax policy criteria and conducted research related to the application of the supply economics theory and the A. B. Laffer curve as stateoriented criteria for the optimisation of national tax policy are investigated. In the second chapter a study was conducted on the impact of the European Union’s taxation requirements, which are limiting the optimisation criteria of state-oriented tax policy, on the tax policy development in Latvia from 1990 to 2021. The regional division of Latvia was considered in
the relation to the tax system. In the third chapter, the process of optimisation of taxation is analysed in two aspects: state-oriented and business-oriented, the concept of reliability of the tax system is introduced. A tax prism method is developed, and a variant optimisation method is proposed to solve the problem of determining a rational combination in the “equity –efficiency” system. The tax system is transformed into a composite system. In the fourth chapter, using the tools developed in Chapter 3, the results of assessing the reliability of the
Latvian tax system after the reforms of 2018 and 2020 are presented. The application of the tax prisms is demonstrated. Time series of monthly tax revenues to the Latvian budget, starting from 2016, are constructed and analysed using time series models. For the implementation of variant optimisation, combined diagrams are built, the results of processing a survey of experts
are given. Based on the analysis of the Vehicle Operation Tax in force (including other tax factors, impacting the cost of vehicle usage) in Latvia, scenario analysis is carried out. Based on the conducted research, the conclusions and recommendations are made.