Potential tax chief wants to cut shadow economy below 20% of GDP soon

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The shadow economy should be cut below 20% of GDP within the next few years, said Ieva Jaunzeme, who has been nominated to head the State Revenue Service (VID).

Jaunzeme's candidacy to head the controversy-wracked institution is yet to be confirmed by the Saeima. 

On November 23 she told Latvian Radio that the tax service should mainly work on cutting unreported wages as well as fighting corruption and bribery.

Jaunzeme said that the tax service's raids on companies are insufficient to fight tax avoidance. The Revenue Service has a huge database and its analytic capabilities should be strengthened as it can easily detect suspicious companies.

She also wants to raise tax morale across the population. "We should state clearly that [not paying taxes] is condemnable," she said.

Jaunzeme admitted that Latvia is still far off from having an acceptable proportion of the shadow economy as per cent of GDP. 

"If we'd have a shadow economy below 20% within five years, that'd be excellent. It'd be outstanding if it was below 15%, but I'm a realist," said Jaunzeme.

As previously reported by LSM, a previous competition earlier this year came up with a new head of VID who promptly resigned before taking up his post.

That contest in turn had been prompted by the sudden death of his predecessor. Before that, a previous tax chief had announced an ambitious reform plan for the organization - and also resigned soon afterwards citing the futility of trying to change it.

Various other controversies have also beset VID, and yet according to recent research Latvia's tax system rates as one of the top 20 in the world.

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