Latvia is preparing for a series of economic and social changes set to take effect in 2026. From adjustments to the minimum wage and family support programs to shifts in taxation and public service costs, a wide range of policies will be updated. These changes, summarized by LSM.lv, will impact both residents and visitors to the country.
Tax Adjustments and Revenue Measures
The Latvian government plans to increase revenue through several tax adjustments. Rates on natural resources like sand, gravel, and soil will rise, with a significant fivefold increase planned for peat taxes beginning in 2027. Gambling taxes are also slated for increases. Simultaneously, consumers will see higher excise duties on tobacco, alcohol – including beer and wine – and fuels like natural gas and gasoline.
A temporary reduction in the Value Added Tax (VAT) will take effect on July 1, 2026, as part of a one-year pilot project. Bread, milk, poultry, and eggs will be subject to a 12% VAT rate. However, this reduction will not extend to books published in Russian. Books not published in Latvian, EU, or OECD languages will retain the standard 21% VAT rate.
Economic Support and Cost of Living
The minimum wage will increase from €740 to €780 per month, with the non-taxable minimum rising from €510 to €550. Families with children will benefit from increased financial support, including a one-time childbirth allowance rising to €600 from €421.17. Childcare allowances for children under 18 months will increase to €298 per month, subject to review every two years, and support for parents of premature babies will be extended.
However, some costs are set to rise. Postal rates will increase, with a standard letter costing €2.35 (excluding VAT), a 2% increase. Registered and insured parcel rates will also see increases, with additional costs per kilogram. Passports and ID cards will also become more expensive, with fees ranging from €30 to €75 depending on processing time.
Regional and Public Service Changes
Visitors to Jūrmala will face higher entry fees, increasing from €3 to €5 per day, with long-term pass prices approximately doubling. Public transport fares will also increase by an average of 7%, with minimal increases for longer journeys. Electricity bills are expected to rise for some households, while natural gas distribution tariffs will decrease by 4.4% on average, though the impact will vary by user group.
Changes to Support for Ukrainian Refugees
Financial support for Ukrainian citizens in Latvia will be reduced in 2026. Employment start-up allowances of €740 will be discontinued, and Ukrainian citizens will no longer receive free public transport or be exempt from healthcare co-payments. These changes reflect a reduction of almost €25 million in the 2026 state budget allocated to Ukrainian refugee support, bringing the total to €39.7 million.
Education Updates
Changes are also coming to the education system. 9th-grade students will take only two centralized exams – in Latvian language and mathematics – while the foreign language exam will become a monitoring test. For high school students, the natural sciences monitoring test will become a centralized exam, with students able to choose between chemistry, physics, biology, or a general natural sciences exam.
Frequently Asked Questions
What is the new minimum wage in Latvia?
The minimum wage will increase from €740 to €780 per month in 2026.
Will the price of groceries change?
The VAT on bread, milk, poultry meat, and eggs will be reduced to 12% as part of a one-year pilot project starting July 1, 2026.
What changes are being made to support for Ukrainian refugees?
Employment start-up allowances, free public transport, and healthcare co-payment exemptions will be discontinued for Ukrainian citizens in Latvia.
As Latvia prepares for these changes, it remains to be seen how these adjustments will impact the country’s economy and the daily lives of its citizens. Will the increased support for families outweigh the rising costs of essential services?
