Planned amendments to the Law on Tax Application in Free Ports and Special Economic Zones do not contribute to business development in municipal areas. They will, however, create a less transparent, controversial an environment generally unfavourable for investments, as reported by representatives of Ventspils nafta terminals.
As noted by the company’s Director General Lars Panclaf, application of tax discounts should serve as a strategic tool for the state administration, not be allowed to be used freely by municipal government. Approval of amendments was rushed and there was no careful consideration of the possible effect on the industry. In addition, decision-makers did not take into consideration the opinion of influential entrepreneurs directly involved in the industry.
«VNT has been experiencing the situation when Ventspils City Council and Ventspils Freeport actively delay the company’s development for a long time. This particularly applies to the situation with delays in regards to the issue of a permit to VNT until the company installs vapour recovery equipment. The matter regarding the location for VRE on port territory has been resolved, but the matter with the issue of a permit is at a standstill. One does not have to be exceptionally clever to understand that amendments will be mainly applied against VNT,» – Panclaf predicts.
He also noted that a stable and transparent legal environment is one of the main factor that, along with the port’s performance, oil product transportation costs and the terminal’s work efficiency, affect VNT’s ability to attract cargoes and develop further.
«VNT co-owners have invested several million euros in the terminal and have started a business in Latvia based on transparent business environment. If we feel investors’ rights are breached, we will definitely defend our interests using all possible means in the country and outside in full accordance with EU regulations and international law,» – added Panclaf.
He also emphasized that, according to statistical data for Q1 2016, a decline was noted in all cargo transport sectors: international cargo transport by rail declined 21%, cargoes carried in transit declined by nearly 49.5%. The same applies to cargo transports to and from Latvia’s ports – 21% decline.
«This year’s planned amendments create serious concerns for investors, including VNT, in regards to having a transparent economic situation and legal certainty in Latvia, which is a warning to the government on just how serious the situation is. It is necessary to secure support for businessmen and work together to find new solutions to assist long-term development of Latvia’s companies, ports, municipalities and Latvia as a whole,» – as concluded by the company’s head.