Some Valka, Latvia Residents Switch Tax Home to Valga, Estonia

12/30/2010 12:19 PM

The southern town of Valga, which is in the process of reorganizing its records on taxpayers, has turned out moderately successful in attracting Latvians from the adjacent twin town of Valka to register as tax-paying residents.

New Valga residents now include about ten Latvians who find that it is cheaper to declare their income in Estonia.

Valga town leaders are amenable to the idea of amending the existing legislation so that it would allow a part of the Latvians' income to flow into the municipal treasury even if they reside on the other side of the border but work on the Estonian side, reported ETV.
Currently the municipality gets about 11.4 percent of the wages earned by the gainfully employed. In a time of strapped budgets, many municipalities are finding it important that all residents and people who use local services also pay taxes locally - that is why Valga put out out the call for people to register as local taxpayers. 
Besides residents who have moved to Valga from surrounding rural areas, said Valga mayor Ivar Unt, the responses also include "Latvians for whom it is cheaper to pay taxes according to the Estonian taxation system."

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