On Tuesday, March 22nd, the Government rejected the objections of the Civic Alliance - Latvia calling for the inclusion of NGO-friendly provisions in the projects implemented under the Recovery and Resilience Mechanism Plan. The government decided to exempt NGOs from VAT only if they perform a function delegated by the state, but this in reality excludes associations and foundations from access to investment, as the plan does not envisage delegating state functions but reallocating funding through open calls for proposals.

In order to strengthen the growth and capacity of associations and foundations, stimulate the creation of new organisations, networking and other activities in specific thematic areas, the Latvian Recovery and Resilience Mechanism Plan included a special support programme for strengthening social security representation and monitoring of public interests wherein only associations and foundations are intended to benefit from investments. These organisations were chosen because they were recognised as being particularly weak. However, with the Ministry of Finance limiting VAT refunds from state budget resources, organisations will not participate in project tenders due to lack of financial resources, as a result of which capacity-building objectives will not be achieved.