Latviski English По-русски
Tuesday 20.03.2018 | Name days: Made, Irbe

Paradnieks: grey economy can be reduced with society’s involvement

(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUState institutions have to perform specific functions to secure payment of taxes in the interest of all residents. Without a doubt, every person working in state administration should promote awareness of residents on the importance of paying taxes. However, according to international practices, there are other creative tools to motivate people to participate voluntarily, explains 12th Saeima deputy Imants Paradnieks.

He says the state-organized «receipt lottery» is one such tool. It is both a positive way to create a taxpayer culture and a communication platform that helps explain why it is important to request receipts for services and goods.

«The receipt lottery is a simple idea that can bring about very good results. There are many international examples that prove this initiative’s positive effect on the state budget and residents’ desire to request receipts from service providers and traders. According to my calculations, this activity would help Latvia increase revenue from VAT by approximately 0.5% a year and increase the state budget by approximately EUR 8 million,» Paradnieks explains.

Paradnieks’ initiative about organizing a receipt lottery across Latvia was supported at the 28 August meeting of the coalition council.

The politician explains that a successful «lottery» would help the state find more money to support families and avoid shaking down other industries.

Europe’s best examples are Malta, Slovakia, Portugal and Poland. Little Malta started organizing receipt lotteries in 1997. Since 2000, the country has had a system in accordance with which several receipt owners receive prize money worth 100 times larger than the amount stated on their receipt once a month.

«We can discuss more detailed organization mechanism for the lottery later. One of the approaches to consider, however, should be Malta’s example. The owner of a receipt for EUR 10 has a chance of winning EUR 1,000. This system is still in place,» adds Paradnieks.

In Portugal, a similar lottery was organized for businesses working in sectors with high ratio of grey money: car repair, beauty and hairdressing salons, as well as accommodation and restaurant businesses. The prize there was tax discount. The second stage of the lottery also included buyers. As a result of this lottery, the number of issued receipts grew 40% and industries participating in the lottery demonstrated higher growth than the state economy as a whole.

«Portugal’s approach in offering tax discounts is a good example on how to improve the situation in sectors that are traditionally considered the grey zone,» Paradnieks explains.

The possibility of winning a prize can be used as a method for promoting habit change not just for taxes. For example, drivers in Sweden had an opportunity to participate in a lottery with prize of USD 3,000. All they had to do is comply with the speed limit. Results were ideal – the area in which the speed limit was 30 km/h experienced a decline of average speed from 32 km/h to 25 km/h. The prize money was formed from money paid in fines, Paradnieks continues.

Lithuania also plans to organize a lottery in November.

«I am certain that at least some portion of our society is tired of the constant problems caused by the enormous grey economy in our country. This is why I believe it would be a good way for residents to personally check the honesty of traders and service providers. In any case, I would like to emphasize one positive thing – only the ones who pay taxes have the chance to win,» he said.


Leave a reply

EU agrees to UK's transition period before Brexit

In a breakthrough in the Brexit talks, the UK gave its consent on Monday to an agreement with the European Union that a tangible border would not be established between British-ruled Northern Ireland and Ireland to have the bloc agree to retain most EU advantages for close to two years leaving the union.

Latvia experiences one of the most rapid export rises among EU member states in January

In January 2017, Latvia experienced one of the most rapid export increases among EU member states when compared to the same month of the previous year, according to data published by Eurostat on Monday, 19 March.

Russian citizens living in Latvia provided more support to Putin than citizens in Russia

During the presidential elections in Russia last week, support provided to President Vladimir Putin by Russian citizens living in Latvia turned out considerably larger than it was in Russia.

Every third illegally downloaded software programme – infected with a virus

Data compiled by International Data Corporation shows: every third illegally downloaded software programme is infected with malicious software. Nevertheless, 69% of consumers and 33% of businesses in Europe procure computers with software from unsafe sources.

Russian economy has grown stable along with oil prices

Higher prices of oil have allowed the Russian economy to recover despite European Union's and U.S. sanctions and in time to benefit the Russian President Vladimir Putin, who has secured his next term in office.

Number of vacant jobs in Latvia grew 17.9% in 2017

In 2017, there were 17.0 thousand job vacancies in Latvia, which was 2.6 thousand vacancies or 17.9 % more than in 2016. In public sector there were 6.1 thousand job vacancies van in private sector 10.9 thousand vacancies.

Latvian cosmetics producers exports goods worth approximately 20 million euros

Cosmetics producers in Latvia export products worth EUR 20 million every year. Volumes increase 5% every year. The main export partner states are located in Europe. Still, there has been a significant increase of export volumes to third countries – to some countries this increase was as large as 60% -70%, according to data from Latvian Cosmetic Manufacturers Association.

US Chamber of Commerce worried that Latvia’s political culture has not changed since Ridzene talks

American Chamber of Commerce in Latvia (ACCL): «We are concerned that Latvian society’s and its government’s political culture has not changed much since the publication of information detailing events associated with Ridzene talks in 2009-2011. The state capture detailed there may still be possible...

Latvia’s prime minister open for talks regarding MPC system’s liquidation

Prime Minister Māris Kučinskis is prepared to discuss the possible liquidation of the mandatory procurement system, but not for all businesses at the same time.

Air temperature in Latvia to remain mostly positive throughout the week

On Monday, 19 March, weather in Latvia will change, as a low atmospheric pressure area together with an atmospheric front will approach the country from the north. The day will be sunny for the most part, but the amount of clouds will increase as hours go by, as reported by State Environment, Geology and Meteorology Centre.

Ukraine: British diplomats expelled from Moscow could work in Kyiv

In a reaction to Russia's announcement that it would expel 23 British diplomats from Moscow as part of the UK-Russia argument over poisoning of double-agent in an English city, Ukrainian Foreign Minister has suggested to his British counterpart that the 23 diplomats could now work in Ukraine.

UGF leader confirms: Lembergs will not be proposed for prime minister post

Aivars Lembergs, who is accused of serious crimes and is currently suspended from his post as chairman of Ventspils City Council, had proposed his candidacy for the post of prime minister of Latvia multiple times in the past. The moment has come at long last when Lembergs will not be an official candidate for the aforementioned post, as BNN was told by the leader of Union of Greens and Farmers’ Saeima faction Augusts Brigmanis.

NATO's defence spending benchmark met by three EU member states

Despite the current demanding security situation, in the NATO military alliance, no more than three member states of the European Union have reached the recommended defence spending sum in 2017 and Estonia is one of them.

In fight for northern Syria, Turkish-backed forces take city from Kurds

In the fight for northern Syria between forces led by Turkey and Kurdish fighters, Turkish-backed units had gained control of the heart of the Syrian-Kurdish city of Afrin.

Russian presidential election pronounced won by Putin

Russian President Vladimir Putin been announced as the winner of the Sunday, March 18, presidential election, as the politician has pledged to devote his new term in office to strengthen Russia’s defences against the West and to improve the quality of life.

Week in Lithuania. Some 5,000 gather in protest rally outside Lithuania's Parliament

Some 5,000 people gathered outside the Lithuanian parliament in Vilnius on Thursday, March 15, to express discontent with the failed parliamentary vote to impeach MP Mindaugas Bastys and the performance of the ruling Lithuanian Farmers and Greens Union.

BNN summary of the week: oligarch talks’ ownership; scandals in Lithuania; Estonia wants direct democracy

BNN offers a summary of this week’s topical news in a variety of categories: Progress; Scandals; Invitation; Fight; Opinion; Decline.

Remembrance day of Latvian Legionnaires passes with shouts and two arrests

The Legionnaires’ remembrance procession in Riga on Friday, 16 March, passed peacefully. Nevertheless, several conflicts did take place among differently-minded people near the Freedom Monument. Two individuals were arrested by police.

Influenza intensity in Latvia – moderate when compared to other European nations

A comparison of influenza activity in Europe shows that it is high or very high in several countries. Latvia’s influenza intensity is considered moderate, as noted by epidemiologist Raina Nikiforova.

Hourly labour costs in Latvia grew 7.3% in 2017

Compared to Q4 2016, in Q4 2017 hourly labour costs rose by 54 cents or 7.3 %, reaching EUR 8.02. Seasonally adjusted data show identical changes – rise of 7.3 %.

Rietumu Banka claims it has not worked with high-risk clients for years

Rietumu Banka has been steadily rejecting high-risk clients for years and has significantly reduced the volume of transactions, as mentioned by the bank’s representatives.

Lithuanian and Estonian businessmen are ahead of Latvia in terms of investments

In Latvia, 36% of small and medium-sized companies have plans to invest in the development of their business this year. In Estonia and Lithuania, on the other hand, the proportion of businesses with development plans is 42% and 46%, respectively, according to results of a recent study performed by SEB Bank.

Russia pledges maximum pressure on UK amid ex-spy poisoning row

Russian top diplomat in the UK has envisaged on Friday, March 16, that the Kremlin would use maximum pressure on London as Moscow insists it has not been involved in the poisoning of a former Russian-British double agent with a Russian-made chemical weapon, as has been found by British investigators.

Latvia’s ministry: Crimea’s annexation is illegal

18 March 2018 will mark four years since the Russian Federation violated Ukraine’s sovereignty and territorial integrity by annexing the Crimean Peninsula and causing military aggression in the country’s eastern region. With its actions the Russian Federation has violated international law and basic principles of international relation, says Latvia’s Foreign Affairs Ministry.

Building gas pipe to Finland, Estonia to organise works for EUR 135 million

Continuing the works on the Balticconnector gas pipeline between Estonia and Finland, the Estonian natural gas network company Elering has stated that around 135 million euros, including a 98-million-euro funding from the European Union, will be invested in the project.