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Baltic business leaders optimistic about future, study says

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Baltic business leaders see signs of security in the outlook of Estonia’s, Latvia’s and Lithuania’s economies, reveals the recent survey by KPMG auditors.

Leaders have faith that the 2–4% economic growth will continue, and they have plans to increase salaries and personnel. “80% of Estonia’s leaders think that economic growth in all three countries will remain between 2–4 %,” CEO of KPMG Baltics, Andris Jegers, said.

The confidence of Estonia’s business leaders has risen during the last three years. This year, 76% of Estonia’s entrepreneurs estimate a salary increase and 32% have plans to raise their employees’ salaries by more than 5%.

Estonia’s corporate taxation model, where earning profits in itself does not bring income tax liability, seems to be popular in all three countries, the study said. However, if earned profits are distributed to shareholders, the company has to pay a 21% rate in Estonia, compared to a flat corporate tax rate of 15% in Latvia and Lithuania. It seems that there are some misunderstandings about the Estonian model in other Baltic countries; for example, in Latvia it is thought that there is no corporate income tax in Estonia, KPMG said.

Source: (2013) KPMG uuring: Balti äriliidrid tuleviku suhtes julgemad. Delfi Majandus, 8. aprill.