On Wednesday, 25 September, the monthly meeting of the Memorandum Council was held to discuss the state budget adopted by the Cabinet of Ministers and public participation in its elaboration, as well as to clarify the issue of importance to NGOs, namely the Ministry of Finance's intention to apply corporate income tax (CIT) to NGOs. Representatives of the Ministry of Finance informed the participants and answered questions.

• The Civic Alliance - Latvia (CAL) had previously expressed its concerns about the Ministry of Finance's proposal to apply corporate income tax (CIT) to NGOs, stating that such a move would significantly undermine the sustainability of civil society organisations and create an unequal situation with respect to business. The CAL asked for clarification as to whether the changes to the UBI had indeed now been removed from the agenda, as these amendments did still appear in other documents prepared by the Ministry of Justice. The Ministry of Finance confirmed that these amendments are currently not included in the 2025 budget package and work on them will continue after the approval of the draft national budget. The Ministry of Finance promised to consult NGOs on the drafting of the CIT amendments.
• The meeting also discussed public participation in the development of the 2025 state budget and the 2025, 2026 and 2027 budget frameworks, which include substantial funding to strengthen security. While all stakeholders are aware that budget and resources are limited and security is a priority, the CAL called on all ministries to clarify whether and how exactly NGOs were consulted on the budget. The CAL believes that dialogue with NGOs should also take place in a context of limited funding to ensure balanced and inclusive decision-making, and it would therefore be valuable to know to what extent the views and recommendations of civil society were taken into account in this year's budget.

The proceedings of the hearing, including presentations by the Ministry of Finance and a video recording of the hearing, can be found here. The next meeting of the Memorandum Council will take place on 30 October and is planned to discuss further budgetary developments and related processes.

The information has been prepared with the financial support of the Society Integration Foundation from the Latvian state budget. The Civic Alliance - Latvia is responsible for the content of the information.