Latviski English По-русски
Wednesday 20.06.2018 | Name days: Rasa, Rasma, Maira

Economic Diary. Latvia Week 30 of 2012

(No Ratings Yet)

If it had not been for the idea of the State Police to create a registry of bank accounts of legal entities and individuals, this week could have been safely called very positive.

The police want to know everything

The State Police (SP) has announced the necessity to create a special registry of bank accounts of legal entities and individuals. They explain this, with reference to the experience of their German colleagues, with the following. Current procedure for acquiring information about the state of a bank account of a person or a company that attracted the attention of the investigation, the investigator needs to file in written requests to all Latvian banks and branches of foreign banks. This procedure is only allowed with the Court’s consent, which slows it even more. Consequently, the following step is also slowed – the filing of the Court sanctioned request about the state and operations of a given bank account. These delays, as ST notes, can prove to be troublesome during investigations related to money laundering or corruption: perpetrators have enough time to transfer the money before the punishing hand of justice reaches their bank accounts.

Representatives of the SP believe that this procedure can be shortened by creating a special registry, access to which will only be allowed to representatives of law enforcement institutions. This registry would include information in which banks does a given person have bank accounts, but not the information about the state of the said bank accounts. The SP would request the information concerning the state of a bank account using regular procedures – through the Court.

The Association of Latvian Commercial Banks (ALCB) reacted critically to this idea. «Creation of a bank account registry is a violation of the bank secret and confidential information, because it will contain information concerning bank accounts of all residents and all companies in the country. In reality, law enforcement institutions only require this information in relation to specific individuals, which make up an insignificant proportion from the total number. The wish to know everything about everyone is – the first step to making Latvia a police state!»- claims governor of ALCB Martiņš Bičevskis. He also said that this kind of data should be stored carefully, because it holds confidential information.

Speaking of secrets and how they are being kept. Latvia has seen its fair share of scandals related to information leaks with Latvian law enforcement institutions. For example, investigation documents about corruption in Latvenergo or the deciphering of telephone conversation recordings of government officials and journalists.

Fiscals serving businessmen

Admittedly, this week is not notable just because of the idea of the SP. There some good news: the period of registration as a VAT payer is planned to be halved in Latvia. According to current regulations concerning the application of VAT, the State Revenue Service (SRS) is obliged to make the decision about registering a given person within ten days. In practice, the entire process takes one week, according to the results of a survey of businessmen. Finance Ministry’s (FM) amendments that were given for review by the meeting of Secretaries of State provide for halving the waiting period to five days.

The ministry is acting in accordance with the 2012 business environment improvement plan. In truth though, the registration period reduction measure was part of the last year’s plan: at the time, it was planned to realize it before the beginning of 2012. It is expected that the change will improve Latvia’s position in the Doing Business rating of the World Bank in terms of the number of problems preventing starting a business. In 2011, the SRS made 11 364 decision in relation to VAT payer registrations. Currently, this status is required to be received by all companies in Latvia with annual revenue of 35 thousand LVL and more.

Tax amnesty

It also became known that the European Commission (EC) approved the Latvian «Law on Tax Support Measures» draft law, which includes a point concerning actual write-off of penalties and fines on budget payments for tens of thousands of companies that suffered from the crisis the most. The draft law offers tax amnesty participants to return the main amount of the debt, saved up until September 1, 2010, as well as 10% of the fine, to the state budget on deferred terms. In return, the SRS will write-off the tax payer’s remaining fine and all related penalties.

Even considering the fact that an according initiative was prepared in 2010, now its target audience became notable thinner. «A part of the businessmen that lost all faith in an operative resolution of this issue and the possibility to invest «amnestied» funds in saving the business, have already gone bankrupt, and will not be able to pay the state even the main amount. However, the «strongest ones» made it: and now, if the government and the parliament can adopt all necessary acts fast enough, the state budget will note an influx of millions of LVL by October, 2012. Business, on the other, hand will be able to use its liberated funds,»- says Jānis Endziņš, Chairman of Commerce and Industry – one of the key figures in the development of tax support draft law.

According to the data of the SRS, around 110 thousand taxpayers can participate in the «tax amnesty» program. This campaign will be applied on PIT, corporate tax, VAT, excise and customs duties. The SRS can offer a period of 60 months for the pay back of the main debt. The minimum amount for transactions on any kind of debt is set at 50 LVL.

To Latvia – by car

Finally, the last event worth mentioning: the change of one particular tendency. According to the State Border Service (SBS), more and more Russian citizens prefer to visit our country by car. The information from the SBS states that 141 436 foreigners came to Latvia in June, 2012. Nearly half of them (65 282) proceeded through Latvian-Russian and Latvian-Belarusian road checkpoints. Those were the places which saw an increase of work to do. Grebnevo checkpoint noted an exceptional rise: 11 0002 this year against 7 681 last year. Terekhovo checkpoint, on the other hand, became less popular: 11 490 and 13 620 respectively. This is mostly dues to the fact that the Riga-Moscow highway (especially on Tverskaya territory) is in a critical state, compared to the decent Pskov- St. Petersburg highway. Suffice to say, where there are tourists, there’s money. According to the Central Statistical Bureau of Latvia, foreigners left 379 million LVL in Latvia in 2011.


Leave a reply

Latvian minister confirms interrogation by Lithuanian investigators

In the case regarding possible corruption in the National Blood Centre, Lithuanian services have interrogated Latvia’s Healthcare Minister Anda Čakša, as confirmed by the official.

Recreational use of marijuana legalised in Canada

Canadian Parliament has adopted a law legalising the recreational use of marijuana nationwide after medical use of the drug has been allowed since 2001. Canada is to become the second country in the world allow buying marijuana for recreational use.

Human Rights Committee: KGB documents should be made publicly accessible

Documents left from Latvian SSR KGB office are part of national document heritage and therefore should be handed over for lifetime storage and be made publicly accessible for research in Latvia’s National Archive.

Non-negotiated contracts; fictive deals: digital television introduction schemes for «mere mortals»

The criminal process revolving around digital television project’s realization in Latvia was launched 15 years ago – in 2003. And it began with a search in a company owned by Andris Šķēle. After that, the list of involved people started expanding with names like Andrejs Ēķis, Jurģis Liepnieks and others.

Doctors unjustifiably charged fees for services worth 255,000 last year

Last year, authorities found that medical institutions that provide state budget-financed healthcare services had charged fees for services worth EUR 254,994, according to data compiled by Health Inspectorate.

Budget Committee picks Swedbank economist for Bank of Latvia Council

On Tuesday, 19 June, Saeima’s Budget and Finance Committee unanimously decided to submit to the Saeima a decision project regarding approval of Mārtiņš Kazāks for the post of member of the council of the Bank of Latvia, as confirmed by Saeima’s press-service.

Farmers Saeima proposes declaring state of emergency in Latvia’s agriculture sector

Farmers Saeima association has sent a letter to Latvia’s State Chancellery, Agriculture Ministry, Finance Ministry and Latvian Association of Local and Regional Governments, detailing a request addressed to the Cabinet of Ministers and Saeima to declare a state of emergency in the country’s agriculture sector because of the lasting drought.

IT specialist’s lawyers appeal client's arrest in recent restaurant case

Lawyers of Edgars Štrombergs, who is the accused party in the Vairāk saules restaurant cash register data manipulation case, have appealed the security measure applied to him, as confirmed by sworn attorney Mareks Halturins.

Russian and Belarusian arms control experts hosted by Lithuania

Russian and Belarusian arms control inspectors have been hosted by Lithuania as NATO forces trained across the Baltic states and Poland in exercise Saber Strike 2018.

Latvia’s ports suffer freight volume decline in first five months of 2018

Latvian ports handled 27.072 million tonnes of freight in the first five months of this year, which is 7.5% less when compared to the same period of last year, according to data compiled by Transport Ministry.

Bicycle rickshaws in Tallinn will need safety belts from July

Seeking to regulate the provision of bicycle rickshaw services in the Estonian capital, the Tallinn City Council has is to more particular bicycle rickshaw regulations that would align the services closer to car taxis.

158 election sites to open in Riga during next Saeima elections

A total of 158 election sites are planned to be opened in Riga for this autumn’s Saeima elections, as confirmed by documents prepared by Riga City Council.

30% of Latvian residents are dissatisfied with their family’s financial state

Residents’ overall mood has declined considerably across all survey positions. Residents have become the most negative about Latvia’s economic situation – 31% of them believe it has worsened. When asked to voice their outlooks for Latvia’s economy in a year from now, 17% of respondents said it will have improved, according to results of Baltic International Bank’s latest Latvian Barometer.

Apple fined 5 million euros for customer rights violations in Australia

A court in Australia has ruled that U.S. tech firm Apple has to pay a fine of 5.7 million euros refusing to repair iPhones and iPads that had been serviced by third parties as those actions breached consumer law.

Latvian coalition still torn about attracting highly-qualified guest workers

Because of differences in opinions among ministries, Latvia’s government is unlikely to support and view the proposal to ease the issue of EU blue card to highly-qualified guest workers without appropriate higher education, says Prime Minister Māris Kučinskis.

Corruption watchdog requests criminal prosecution of Bank of Latvia head

Latvia’s Corruption Prevention and Combating Bureau has sent materials of a criminal case to the prosecutor’s office with a request to commence criminal prosecution of Bank of Latvia governor Ilmārs Rimšēvičs and businessman Māris Martinsons.

Riga City Council votes to add Vidzeme market to Riga Central Market’s capital

Riga City Council’s City Property Development Committee has voted in favour of adding Vidzeme Market to AS Riga Central Market’s capital. Opposition members voted against this during the meeting.

Police dismantle criminal group specialising in storage and transportation of excise goods

Officers of Latvia’s State Revenue Service discovered a suspicious shipment during a routine inspection of a vehicle at Riga Passenger Port. With help from State Police, officers found more than 2.3 million illegal cigarettes and 960 litres of spirit, as confirmed by police.

airBaltic receives its ninth Bombardier CS300 aircraft

On 17 June, Latvia’s airBaltic airline received its ninth Bombardier CS300 aircraft. The airline plans to expand its existing aircraft fleet with 14 CS300 aircraft before the end of the year.

Employment agency invites employers to apply for new job support programme

Employers will be able to apply for participation in a programme of the European Social Fund to help create subsidized jobs for unemployed people. Eighteen offices of Latvia’s State Employment Agency will be offering registration until 27 June.

Programme: government continues working on MPC plan’s cancellation

The disproportionate mandatory procurement component costs have become one of the biggest political scandals in Latvia since autumn last year. Attempts to put an end to the MPC system are continuing alongside the search of those responsible for the dysfunctional system. The government’s work group say it is impossible to completely cancel the system, as reported by Nekā Personīga programme.

De Facto: ABLV Bank’s self-liquidation – controlled or not so much?

«Controlled self-liquidation» – this is the undefined procedure Finance and Capital Market Commission has picked for ABLV Bank. This decision came after three months of document assessment, discussions with politicians and active media campaigns, as noted by De Facto journalists.

Latvia police investigate link between murdered insolvency administrator and missing businessman

Latvia’s State Police have begun an investigation of a possible link between the murdered insolvency administrator Mārtiņš Bunkus and the missing businessman Andris Bojārs, as confirmed by police representative Ilze Jurēvica.

Hundreds of migrants rejected in Italy allowed to leave ships in Spain

Migrants taken on rescue ships in the Mediterranean Sea and turned away by Italy and Malta have arrived in Spain's port of Valencia as three ships arrived in the harbour, including the Aquarius, which rescued the 630 migrants the week before.

Monday expected to be exceptionally hot in Latvia

Cool masses of air will flow into Latvia at the beginning of the week. Wind speed will increase as well. Several rain-cloud zones will pass through the country. Monday is expected to be the hottest day of this week in Latvia, as air temperature will likely reach +23° C… +26° C in most of the country. South-east regions of Latvia may even experience air temperature of +29° C.