RIGA (AFX) - The Latvian government has approved a plan for cutting inflation to 2-3 pct by 2010-11 that includes changes to credit and real estate legislation and also aims to have a budget surplus within three or four years.
One of the steps aimed at curbing inflation is the introduction of a higher state duty payable for registering proprietary rights and mortgages, as well as the introduction of an individual income tax to be imposed on real estate deals.
Latvian finance minister Oskars Spurdzins said the government will introduce an income tax on properties sold within three years of their purchase.
Under the new plan, banks that issue loans must in future take into account only the borrowers' legal income and must set a minimum downpayment.
Spurdzins said the Latvian national budget for 2007 must be deficit-free and the budget for 2008 must also be well balanced. The country could have a surplus in 2009 and 2010, he added.
Government ministries will also be asked to review their expenditure but Spurdzins said there are no plans at present to freeze wages in the public sector, which will be raised to previously determined limits.
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