Ilze Badere, Member of the Council of the State Audit Office, explained that the Consolidated Economic Annual Report is basically the balance sheet of the whole of Latvia, which includes reports on ministries, local governments, taxes administered by the State Revenue Service (VID), the Saeima and the State Audit Office itself. In total, the report is made up of 73 accounts and a balance sheet total of €40.6 billion.
"Once there is a report, we have to understand whether we can trust it. Whether what is included in it - so assets, everything the state owns, our debtors, our liabilities - whether it is all correctly valued, correctly accounted for, whether we can trust the data. (...) It is important to know what we own, because if we don't record something, it can be stolen," Badere said.
The Audit Office representative said that the tax report produced by the State Revenue Service has the most errors and shortcomings.
"This report also includes the tax report prepared by the State Revenue Service, and it is this report that we cannot really trust, that we cannot verify. So the information contained in this report is still not verifiable by the auditors. The logical question then is: on what data, on what basis, and how well can we push for changes in taxation or tax policy if we cannot even produce a tax report that we can really trust and that the auditor can verify?"
She acknowledged, however, that the system is complex. The State Audit Office is therefore trying to push the VID to understand the organization of these accounts.
This year there has been progress in making the report error-free but the State Audit Office would like to see a faster pace of improvement.
"The biggest losers, if you can say so, are the representatives of the government and the Saeima, who are working on the new budget for next year and also on tax changes. If the information in the tax report was accurate, and comprehensively presented, we could make a much better assessment not only of how much is actually collected in taxes, but also provide a lot of analytical information about how much we might be owed, how we are doing with this or that tax revenue, and give a better idea for next year's budgeting and various tax changes," State Audit Office auditor Edgars Korčagins said in an interview with Latvian Radio.
