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Ceturtdiena 22.03.2018 | Name days: Tamāra, Dziedra

Baltic Taxi has created a system to avoid paying VAT to the country

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUBaltic Taxi uses a micro enterprise-based scheme that circumvents the payment of the Value Added Tax. In addition, this system does not provide any social guarantees to the company’s drivers. When asked about paying taxes, Panda taxi brand dealers become uncharacteristically non-talkative.

Baltic Taxi was originally founded as a cooperation partner for airBaltic when the airline was being managed by Bertold Flick. Both companies – airBaltic and Baltic Taxi – have similar emblems and similar colours. Everything was well-planned. One Janis Naglis was put up as owner of Baltic Taxi, as reported by Aizliegtais paņēmiens programme of LTV.

Bertold Flick became the main shareholder of Baltic Taxi in 2010. In 2012, when Flick left Latvia, Andris Skele took his place in the company. Baltic Taxi was taken over by Liepājas autobusu parks. Indirect shareholders of the company include Inpo17, which was indirectly owned by Andris Skele’s wife, daughters and Edgars Skenders. Business was good, and in 2013 Baltic Taxi was working with turnover of nearly EUR 5 million.

Then the company turned its sights to a new business concept – the country’s newly-adopted micro-enterprise tax regime. This is when fundamental changes had first appeared. Baltic Taxi was divided into countless small firms, owners of which became the taxi drivers. Cars were ‘tossed around’ to those firms. They did retain the original dispatch centre, however. This allowed the company to optimize tax payments, opposite to the point of micro-enterprises – development of small businesses.

After some time the State Revenue Service told the company that such actions are prohibited. An enormous tax debt was calculated – more than EUR 400,000, which was equal to all the money the company had saved up in 2013 and first half of 2014 after changing its original business model. Later Baltic Taxi decided to rename itself Baltijas taksometrs, which later followed the insolvency route. Now all tax debts are water under the bridge.

But the business did not end there. In May 2015, an unknown company named Environment Solution bought the Baltic Taxi brand from an auction and then founded a company of the same name.

It turned out later that Sergei Senkans is behind Environmental Solution. Senkans has ties to Andris Skele. In the 10th Saeima, where Skele was a deputy, Senkans was his official assistant. Now the brand has returned to its owner.

Baltic Taxi’s business architecture consists of a massive network of micro enterprises. SRS is still against this form of business. Naglis calls it a franchise system.

Baltic Taxi’s massive network’s accounting is managed by a high-class specialist. It doesn’t take a genius to figure out in whose interest the specialist works. It is worth mentioning that Ilze Palmbaha had once said that the high level of grey economy in the country is what keeps Latvia from developing.

The fact that all Borts companies pay annual taxes in very similar amounts – approximately EUR 4,000 – is not exactly a coincidence. EUR 4,000 is 9% of turnover a typical micro enterprise is supposed to pay to the state in taxes. In this case, turnover of each micro enterprise is nearly EUR 50,000. The key is that this amount is the threshold at which there is no need to register one’s company as VAT payer and pay 21% to the state. Should those firms merge, their total turnover would definitely exceed EUR 500,000, making it obligatory to pay a considerable amount of VAT.

According to LTV’s estimates, turnover of each ‘Bort’ is likely drawn out in accordance with accounting rules, rather than being objective. An interviewed taxi driver says that each Baltic Taxi driver has to pay EUR 110 to the office every day. This amount includes fuel money. The driver’s wage is everything earned above EUR 110. With good luck, a single driver can earn EUR 700 a month. It is worth keeping in mind that there are three drivers per car.

With that, the company earns EUR 3,300 from each car every month. The total earnings from a single car are EUR 5,400 per month and at least EUR 64,800 annually, which exceeds the state established VAT threshold (EUR 50,000). In addition, working in a micro enterprise mode, the EUR 4,000 paid by drivers to the state do not provide any substantial social guarantees. They can pay the social guarantee fees on their own. However, it is likely that they can only afford to pay that only when their shift comes.

Panda Taxi works with a similar principle – many small companies that form a single brand. The only difference is that drivers can use their own cars for work, but only as long as those cars comply with specific standards.


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