Latvia Finance Minister: government’s 2011 priority– shadow economy combat | BNN-NEWS.COM

Latvia Finance Minister: government’s 2011 priority– shadow economy combat | BNN-NEWS.COM

Next year, one of the government’s priorities is the shadow economy prevention; therefore, the responsible authorities have been ordered to carry out the measures that would reduce the proportion of illegal economy, and lessen the administrative burden on diligent entrepreneurs, indicates the Minister of Finance Andris Vilks.
Currently, the work on the most trustful entrepreneur list («the white list») creation is being carried out. Several European Union (EU) member states have different approaches to special relationship building between taxpayers and tax administration; accordingly, to find the most optimal approach for such system’s introduction in Latvia, other countries’ practice is thoroughly assessed, as well as the possibilities to adjust these practices to Latvia’s conditions, the Ministry of Finance informs the business portal BNN.
One of the planned measures is the concept of a single fine measure and delay payment deletion for those entrepreneurs, who return the principal tax debt sum until the fixed time-limit. Considering that the aim of the task is to ease the tax burden on entrepreneurs. At the moment, the Ministry of Finance continues the work in cooperation with partners on a detailed task scheme draft, to define the criteria, as well as, study the legal nuances in order to offer the opportunity for wider target groups to organize their tax debt obligations.
To increase the accuracy of the State Revenue Service (SRS) risk analysis system, the SRS has already been provided with the information from the Bank of Latvia’s managed Credit Register, after Saeima adopted amendments in the laws on credit institutions, companies and insurance enterprises monitoring.
The plan also provides for a review of the existing corporate income tax and individual income tax privileges with the aim of creating a transparent and easily administered tax system, because every tax relief not only reduces government’s budget revenues, but also increases the expenditure at the expense of administration costs.
To facilitate the declaration of annual income, improve electronic declaration system and provide automatic declaration filling with the SRS on-hand information, Saeima has already adopted amendments to the law on individual income tax, coming into force in January 2012.