Latviski English По-русски
Tuesday 20.02.2018 | Name days: Smuidra, Vitauts, Smuidris

Economic Diary of Latvia. Harder to dodge taxes now

(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUOn the eve of putting down his duties as Finance Minister of Latvia Andris Vilks signed a multilateral agreement on international automatic exchange of information regarding financial accounts.

Experts have already described this event as refusal of banking secrets and a gigantic step toward obliterating tax oases.

Based on this agreement, tax institutions will automatically exchange information about residents’ bank accounts, including information regarding beneficiaries, interest payments, dividends, account balance, income from insurance products, interest from financial deposits, etc. The exchange of information will include legal persons and private persons. The first exchange of information will take place September 2017.

This document was signed during a global forum of OECD in Berlin October 29th. It is dedicated to transparency and exchange of information for better tax administration.

«The signing of this declaration is a step toward reducing shadow economy in cooperation with other countries. It is also brings Latvia one step closer to becoming a member of OECD,» – said Andris Vilks.

Everything is according to schedule

Meanwhile in Latvia, in spite of slower economic growth, budget revenue from taxes is above last year’s indexes, as reported by Latvian Finance Ministry.

In particular, revenue of the consolidated budget for the nine months of 2014 has grown by 1.4% (EUR 88.1 million) in comparison with last year. General tax revenue has increased 4% (EUR 189.7 million).

Experts explain better results with positive results of measures aimed to combat shadow economy. The campaign to control and check car service stations is mentioned as an example. Following this campaign, wages in this sector increased by nearly EUR 500,000 this August.

Revenue growth of the state consolidated budget was largely possible because of increased administration of PIT – the increase was 8.5%. This trend is explained with increased administration with reduced payments, part of which were carried out in December 2013. At the same time, a notable increase in the administration of real estate property tax was noted in consolidated budget of municipalities – 9.3% or EUR 13 million. Indexes have improved thanks to increased cadastral value and timely payment of the tax.

Minimal wages may be increased

One of the most direct promises of Prime Minister Laimdota Straujuma’s government is the plan to increase minimal wages by EUR 40 next year. The current set minimal wage is EUR 320 in Latvia.

The government’s declaration also mentions that this growth will continue next week.

Starting with 2016 the government plans to introduce tax-free allowance, increasing it for recipients of small wages and maintaining it for people with higher income. The mechanism will not be applied to large salaries at all.

The government also promises to increase benefits for dependants. Among other things, the Cabinet of Ministers plans to resolve the problems of long-term and regional unemployment by supporting employment in risk groups. The government is certain programmes for requalification of unemployed persons have to be coordinated with needs of the national economy and training should be carried out at specific enterprises.

Life is becoming better in Latvia

The car market, which is considered the reflection of a country’s state of economy, is reported to have an increase in activity.

According to CSDD, a total of 52,939 lightweight cars have undergone first registration in Latvia in the first nine months of 2014, which is 12.7% more than in the same period of 2013.

7,521 trucks have been registered in Latvia this year (+0.3% more than in 2013), 345 buses (-8.7%), 1,930 motorcycles and tricycles (+21.2%), 171 quadricycles (+33.6%) and 4,874 trailers and semi-trailers (-7.3%).

A total of 69,561 vehicles have been registered in Latvia in the first nine months of 2014, which is 8.8% more than in the same period of 2013.

In order to make sure there is a surface for vehicles to drive on, Transport Ministry has calculated that the total funding for roads may reach EUR 357 million in 2015. The ministry has also submitted a request to the government to allocate an additional EUR 47.9 million for repairs of regional and local roads. If funding is allocated, repairs will be carried out in 46 locations, and if not, repairs will be carried out only in 7 locations.


Leave a reply

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.

«A good friend» pays 100,000 euro bail for arrested governor of the Bank of Latvia

Corruption Prevention and Combating Bureau (CPCB) has applied a bail of 100,000 euros for the arrested governor of the Bank of Latvia Ilmārs Rimšēvičs. The bail has already been paid to the State Treasury account, as confirmed by his lawyer Saulvedis Vārpiņš.

NP: ABLV blames Latvian officials for misleading foreign institutions

Last week, the reputation of Latvia’s second largest bank – ABLV – was seriously impacted. It is believed that money laundering was this bank’s main operation, and that it failed to comply with the prohibition on cooperation with North Korea. The bank is also accused of bribery. US Department of the Treasury Financial Crimes Enforcement Network rarely speaks so directly of any credit institution, says Nekā personīga programme.

Changes to third-country student residence in Estonia to add more responsibilities to university staff

The Estonian government has backed planned amendments are to the Aliens Law implementing an EU directive into Estonian law, which change how third-country nationals on enter and reside in Estonia if they are study or performing research work.

Russia criticises U.S. charges of Russian meddling in U.S. election

The Foreign Minister of Russia, Sergei Lavrov, has criticised the charges announced by the U.S. Federal Bureau of Investigation, against 13 Russian nationals and three companies for election meddling.

Government plans to form four riot prevention units in Latvian regions

The State Police plans to form four riot prevention units in Latvia’s regions, says Chief of State Police Ints Ķuzis.

Syrian Kurdish fighters under attack by Turkey announce deal with Syrian government forces

The mainly Kurdish militia in the north-west of Syria have announced having reached an agreement with the Syrian government for the latter to deploy its soldiers in order to help Kurds repel the current Turkish attack.

NCP: it is highly important to replace management of Bank of Latvia and FCMC

Considering recent events, which have not only impacted the country’s finance sector but also its international reputation, the New Conservative Party (NCP) demands immediate measures to be undertaken to replace the management of the Bank of Latvia and the Finance and Capital Market Commission. On top of that, it is also necessary to perform radical changes in the organization and supervision of those institutions, says NCP chairman Jānis Bordāns.

Air temperature in Latvia to gradually decline this week

On Monday, 19 February, atmospheric pressure will increase slightly in the north. With that, it is expected to snow only around Kurzeme’s south-west. Air temperature in most of Latvia will stay at -1° C… -6° C. In Kurzeme, however, air temperature will be around 0° C… +1° C, as reported by State Environment, Geology and Meteorology Centre.

Week in Lithuania. Lithuania celebrating centennial of statehood

Leaders of European countries gathered in Vilnius on Friday, February 16, to celebrate the 100-year anniversary of restored statehood, and festive events were taking place in many cities and towns of Lithuania.

BNN summary of the week: minister threatened with dismissal; ABLV Bank scandal

BNN offers a summary of this week’s topical news in a variety of categories: Change; Fight; Court; Problem; Decline; Commentary; Future; Proposal

SRS uncovered violations in 169 inspections at catering companies last year

In 2017, the State Revenue Service (SRS) performed a total of 989 inspections at 212 catering companies. This includes 182 thematic inspections for 125 taxpayers. Violations were uncovered in 169 inspections. The most common violation was manipulation with cash registers, according to information published by SRS.