bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Ceturtdiena 22.02.2018 | Name days: Rigonda, Adrians, Ārija

Global economic crime spread; Latvia has the highest VAT shortfall of GDP

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUEconomic crimes against enterprises and other legal persons continue to grow in the world. According to PwC 2014 annual report on global economic crime, approximately 37% of respondents admit to have become victims of economic crimes (compared to 2011, this is an increase of +3 percentage points).

In addition to the aforementioned figure, 25% admit to have become victims of cyber attacks, because fraudsters now often use high-tech solutions to acquire what they need.

The PwC survey, which is the most large-scale one in the world, concluded that theft remains the most popular type of economic crime in the world, mentioned by 69% of respondents. Theft is followed by public procurement fraud (29%), bribery and corruption (27%), cyber crimes (24%) and accounting fraud (22%). Other types of crime include human resource fraud, money laundering, theft of intellectual property or information, mortgage fraud and tax fraud.

‘Economic crime has become a truly borderless threat. The reality of fraud is that it can impact a company’s revenues as directly as other business and market forces,’ – said Steven Skalak, partner in PwC’s Forensic Services practice and lead editor of the global survey.

Skalak adds that economic fraudsters continue to function. They adapt to such ever-changing global market conditions as implementation of new technologies and expansion of newly-developed countries.

He adds that the situation is only made worse by the financial impact economic crimes have on a wide range of enterprises. Economic crimes ruin internal processes, reduce employees’ honesty and reputation of companies they work for.

Where does economic crime take place?

Economic crime is a wide-spread and global problem. In a regional perspective, economic crime is present most notably in Africa, where 50% of respondents admit to have become victims (59% in 2011). It is followed by North America (41%), Eastern Europe (39%), South America and Western Europe (35% each), Asia and countries of the Pacific (32%) and the Middle East (21%).

Respondents from 65 countries and territories admit that they have had experience with economic crimes at one point or another. Respondents from South Africa note the highest level – 69% (60% in 2011). Crime rates continue to grow rapidly in Ukraine – 63% (36% three years ago), Russia – 60% (37% in 2011) and Australia – 57% (47% in 2011).

The survey also mentions eight newly-developed countries (Brazil, Russia, India, China, South African Republic, Turkey, Mexico and Indonesia), where 40% of respondents admit they have experienced economic crime in the way of outflow of riches.

Which sectors suffer the most?

Economic crimes have the highest impact on financial sector, retail trade and consumer goods sector and communications sector. Nearly 50% of respondents in each sector admit to have become victims of economic crimes at some point. Financial services organization sometimes become victims of large-scale cyber crime and money laundering victims. Retailers and communications companies often suffer the most from thieves.

How to uncover fraud?

It is concluded in the survey that 55% of all economic crimes are uncovered thanks to internal organization measures. These include reports about suspicious deals, internal audit or fraud monitoring management.

It is mentioned in the survey that respondents predict further increase in the number of economic crimes in nearly all categories in the neat future. Managers of different enterprises are mostly concerned over corruption and bribery.

A commentary about the situation in Latvia

PwC Taxes and Legal Consultancy Department manager in Latvia Ilze Rauza describes the situation in Latvia the following way: ‘Even though there has been no in-depth analysis of the situation in Latvia, the 2013 report about the shortfall of VAT in 27 EU member states reveals that Latvia is among those countries that have arguably the highest VAT shortfall of GDP. This indicates high rates of tax fraud in the country.’

Rauza adds that tax crimes in Latvia are only increased by problems such as – household financial difficulties, benefits of economic crimes and personal justification of committing such crimes. Without a doubt, tax fraud and other types of economic crimes create a serious distortion of competition in the country. Latvian courts are unable to handle the numbers of different tax disputes. However, there have been positive developments in VAT cases, which may contribute to the reduction of VAT fraud cases in a long-term perspective.

Ref: 103.109.109.4757


Leave a reply

  1. P. says:

    A better term for taxation is legalized plunder.

    Thumb up 0 Thumb down 0

FCMC invites Bank of Latvia to provide ABLV Bank with yet another emergency loan

The Finance and Capital Market Commission (FCMC) has invited the Bank of Latvia to issue ABLV Bank another emergency loan.

Crime rate in 2017 was the lowest in Latvia’s history

Last year’s crime rate turned out the lowest in Latvia’s history, as reported by Prosecutor General Ēriks Kalnmeiers in his annual report.

LEC: government priorities should include searching for causes and solutions, not the guilty

Latvian Employers’ Confederation (LEC) is worried about ongoing events and their negative effect on the stability and future development of the country’s economy. LEC believes that stabilization of the financial situation requires careful coordination of actions between institutions and the government.

Producer price level in Latvia grew 0.9% in January

Compared to December 2017, level of producer prices in Latvian industry rose by 0.9 % in January 2018. Prices of products sold on the domestic market went up by 1.2 % and prices of exported products by 0.6 %.

Latvian President believes country’s financial system is stable; prime minister plans to report to European Council

«Latvia’s financial system is stable, and there is no reason to worry about possible instability of the banking system. Banks continue working as usual,» says the President of Latvia Raimonds Vējonis.

Corruption Perception Index in Latvia experienced no major changes in 2017

Latvia’s positions did not improve much in Transparency International’s compiled Corruption Perception Index 2017, said Delna – Society for Openness acting director Liene Gātere in an interview to Rīta panorāma programme.

Latvian citizens arrested in Britain under suspicions of organizing slavery

Five people were arrested in a joint international operation by Latvian and British law enforcement operatives, as confirmed by Latvian State Police.

Opinion: Russia is trying to use the situation to create chaos in Latvia

Russia is trying to use the established situation to create chaos in Latvia. Efforts, however, are fated to fail, says chairman of Saeima’s Defence, Internal Affairs and Corruption Prevention Committee Ainars Latkovskis.

Dismissal requested for Latvia’s Finance Minister; parties worried about finance sector sinking deeper

Latvia’s Finance Minister Dana Reizniece-Ozola has failed to prevent the decision made by United States Department of the Treasury, which is ruinous for the country’s financial sector and humiliating for its reputation, says chairman of New Conservative Party Jānis Bordāns.

Defence Ministry: a massive information campaign is being realized against Latvia

Considering events of the last several days in the country’s banking sector and the arrest of the governor of the Bank of Latvia – Ilmārs Rimšēvičs – it is entirely possible that someone is currently realizing a massive information operation. Its structure and execution is not unlike the one observed in USA, France and Germany during the pre-election period, BNN was told by Latvia’s Defence Ministry.

Latvian parliament to search for ways to dismiss current Bank of Latvia governor

Members of Latvia’s Saeima plan to search for a solution in the matter regarding the possible dismissal of the governor of the Bank of Latvia Ilmārs Rimšēvičs.

Bank of Latvia governor: I have received death threats

«This situation is incredibly complicated. This situation is quite possibly the most complicated one I have ever been in. I feel a great deal of support from people I don’t know, as well as my friends and family members. I have decided to not back down – I am innocent. The the people attacking my reputation have only one goal in mind – to have me step down,» said the governor of the Bank of Latvia Ilmārs Rimšēvičs during a press conference on Tuesday, 20 February.

Proportion of people working in Latvia’s culture sector is larger than the average in EU

The number of people working in Latvia’s culture sector is equal to 4.5% of the total number of employed people in the country. This proportion is also larger than the average one across the European Union, according to data published by Eurostat.

Ministry: idea for compulsory secondary education should be put on hold for now

Considering that Latvia’s Education and Science Ministry has several ongoing industry reforms, it would be best to put the proposal for compulsory secondary education on hold, said Education and Science Minister Kārlis Šadurskis during a meeting of Saeima’s Education, Culture and Science Committee.

Association: ECB should become more involved in resolving Latvia’s financial scandal

Association of Latvian Commercial Banks sees a need for the European Central Bank (ECB) to become more involved in the discussion and help resolve the situation, considering evaluation of ABLV Bank’s business model is in direct competence of ECB.

Hesburger to invest 11.5 million euros in Baltics this year

The largest fast food catering restaurant network in Finland and Baltic States – Hesburger – plans to invest approximately EUR 11.5 million in business development this year. EUR 5.5 million are planned to be invested in Latvia’s market, says Hesburger Development Director Ieva Salmela.

Air temperature drops below -30° C in certain parts of Northern Europe

On Tuesday, 20 February, air temperature in central and northern parts of Finland dropped to -27° C… -31° C in morning hours. In Norway, close to the Finnish border, air temperature has dropped as far as -34° C, according to data from meteorological stations.

FCMC suspects someone may want to undermine Latvia’s financial sector

It is not impossible that someone may want to undermine Latvia’s financial sector, said chairman of Latvian Finance and Capital Market Commission Pēters Putniņš in an interview to Rīta Panorāma programme on Tuesday, 20 February.

European exchange indexes decline; Wall Street enjoys a holiday

European exchange indexes declined on Monday, 19 February. No trading was performed at American stock markets, because the country was celebrating President’s Day.

Party: Latvian banking system’s crisis threatens Skanste neighbourhood's development

There are serious risks associated with European Union’s co-financed project for the revitalization of Skanste neighbourhood, including construction of Skanste tramway line, says member of Riga City Council and For Latvia’s Development party Viesturs Zeps.

Public opinion: KGB documents should be made publicly accessible immediately

Latvia’s society believes the KGB documents should be made publicly accessible immediately. In addition, residents say they are confident in their ability to discuss those documents without the country’s supervision, which takes the form of expert opinions prevailing over society’s moral views, as stated by guest researcher of History Institute of the University of Latvia M. His. Marta Starostina.

For Latvia’s Development: the prime minister is gone, but finance minister claims otherwise

«What we have observed in the past several days is that Latvia’s financial sector has received several heavy strikes as a result of the government’s uncoordinated and chaotic actions. Prime Minister Māris Kučinskis has evidently ‘disappeared’ and offers no clear plans to resolve the crisis, whereas Finance Minister Dana Reizniece-Ozola says different things in every interview. Such behaviour will not help resolve the crisis. It could instead pull the country’s financial sector in a much deeper crisis,» says chairman of For Latvia’s Development Juris Pūce.

Bank of Latvia provided ABLV Bank with a loan of 97.5 mln euros in exchange for securities pledge

The Bank of Latvia has provided ABLV Bank with a loan worth EUR 97.5 million in exchange for securities pledge, as confirmed by the financial institution.

Prime Minister: Bank of Latvia governor is not allowed to take official post

As a security measure, the governor of the Bank of Latvia Ilmārs Rimšēvičs has been applied with a prohibition to take post, said Latvian Prime Minister Māris Kučinskis after a meeting of the Cabinet of Ministers.

Poland's halt to logging in ancient forest came after irreparable damage

Although Poland has stated logging in the old-growth Bialowieza forest has been stopped, Warsaw has failed to reveal the amount of trees already cut down.