Finance Ministry invites feedback on shadow economy combat plan

The Ministry of Finance (MoF) has prepared a draft plan for curbing the shadow economy for 2024-2027 and has also started a public consultation process about it. 

The plan is a medium-term policy planning document, whose priority for the next four years is to reduce the shadow economy in specific sectors of the economy in close cooperation with other ministries and representatives of non-governmental organizations (NGOs).

With the order of the Cabinet of Ministers (MK) approved on March 30, 2023, three priority economic sectors for reducing the shadow economy have been determined: construction, healthcare, and the wholesale and retail trade, particularly with the use of cash transactions.

In order to develop proposals for the Shadow Economy Curtailment Plan 2024-2027 four different working groups were created. The draft plan is intended to work in conjunction with the Tax Policy Guidelines for 2024-2027.

The plan reflects several scenarios, one of which envisages reducing the shadow economy by 1 percentage point by 2027, bringing 120 million euros of extra money into state coffers.

The FM has currently started a public consultation process, during which interested parties can make comments and submit proposals on the draft plan on the Draft Legislation portal.

As previously reported by LSM, credible data suggests that the 'shadow' or 'gray' economy accounts for more than a quarter of Latvian GDP and remains a persistent problem.  

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