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Monday 18.11.2019 | Name days: Doloresa, Aleksandrs

Tax amnesty could be offered to 121 557 debtors

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A total of 121 557 debtors in Latvia could be granted tax debts amnesty, indicates the Ministry of Finance (MF) prepared plan on combating the shadow economy and ensuring fair competition.

The exact amnesty implementation date is not yet known. At the present moment, it is planned that the tax amnesty should be applied to all tax debts, which incurred before the initiation date of it, reports LETA.

The initial MF plan foresees that the fine for delay in payment and penalties are cancelled if the debtor pays the principal debt fully, or agrees until the end of the amnesty period with the State Revenue Service (SRS) on a payment schedule and complies with it. If the payment schedule is not observed, the previously cancelled penalty and delay money during the amnesty period is renewed. Moreover, after the end of the amnesty period the fine for delay in payment is doubled.

Currently, the amnesty period is planned to be six months. The sending of amnesty offer letters to those taxpayers whose liabilities exceed 100 lats is also discussed, as well as the dissemination of information in the public space – on the websites of MF and SRS, by e-mail, in the press, on TV, radio, news portals, and in other media.

Some of the possible debt payment methods could be money transfer from an internet bank, money transfer to the bank’s branch, as well as, cash settlements at the bank’s branch.

The MF points out that on September 1, this year, 121 557 tax debtors, with the overall sum of principal debt totalling 672 283 000 lats, were registered at the SRS. For 60 636 debtors the sum exceeded 100 lats, comprising in total 670 972 000 lats; while for 60 921 tax debtors the sum falls below 100 lats, accounting for the overall debt sum – 1 311 190 lats.

It is planned that the direct communication letters will be sent to those tax debtors (in total 60 636) whose principal debt sum is over 100 lats.

According to the SRS estimations, the preparation and submission cost of such individual amnesty offer letter would be 0.35 santims; thus additional financing at the extent of 21 222 lats is necessary.

Moreover, those taxpayers, whose principal debt sum is below 100 lats, will be given the opportunity to participate in amnesty because of free access to information via mass media.

Each taxpayer will be invited to contact the SRS and check their liability status; they will be consulted about the payment options as well.

It is already clear that debtors with principal debt sum below 100 lats will not be given the opportunity to prepare a payment schedule, and the amount of the debt will have to be covered by the end of the amnesty period.

Considering the experience of other countries, the benefit of the tax amnesty can be estimated at the extent of 0.9% of the total tax revenue, emphasizes the MF.

The ministry is still continuing the work on the draft of the trusted entrepreneur list and it is not yet clear when the specific norms will be prepared for reviewing, confirms the Head of MF Communication Department Baiba Melnace.

It was previously scheduled that by October 1, 2010 the MF and SRS will have prepared an informative report on the trusted entrepreneur list creation principles and its operation mechanisms, providing an equal treatment for foreign businessmen. Likewise, it was also intended to draft the concept of a single measure of extinguishing the penalties and fines for delay in payment for those entrepreneurs who pay the principal debt sum until a certain time-limit.

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