According to research by Tax Foundation, a Washington, U.S. based tax policy research organization, Estonia's tax code is the best among Organization for Economic Cooperation and Development (OECD) member states with Latvia's in second place, eng.lsm.lv reports.
The data supporting this is presented in the 2018 International Tax Competitiveness Index which seeks to measure the extent to which a country’s tax system adheres to two important aspects of tax policy: competitiveness and neutrality.
A competitive tax code is one that keeps marginal tax rates low. A neutral tax code is one that seeks to raise the most revenue with the fewest economic distortions.
"A tax code that is competitive and neutral promotes sustainable economic growth and investment while raising sufficient revenue for government priorities," say the authors of the report.
According to the rankings, Latvia does very well on corporate, individual and property taxes but poorly on consumption taxes. Nevertheless it is enough to secure second spot out of 35 OECD members included in the survey, behind Estonia and ahead of New Zealand in third place.
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