Row continues over shutdown of classified ads website

Take note – story published 6 years and 9 months ago

Moves by Latvia's tax authority to shut down a popular classified ads website which they say was being used to avoid tax, continue to generate more headlines in the country than anything else.

At a press conference called by the owners of the site to insist they had done nothing wrong, Andris Grikis, owner of the Inbokss online company, claimed that the action taken against has provoked outrage in the IT industry and said companies may opt to leave Latvian jurisdiction to protect their business.

The Latvian government's silence on the issue was inexplicable, said Grikis. "If that is the attitude of the state, the remaining IT companies in Latvia will be prompted to leave the country," he said.

"The State Revenue Service has demanded a large portion of the company's database to be handed over, but SIA Internet appealed the decision to the Administrative Court," added Grikis, pointing out that halting the portal's operations was, given the circumstances, unacceptable. "What the Revenue Service has done is it sent out the most unimaginable signal to the IT businesses," he said.

Asked to clarify the government's position, Economics Minister Arvils Aseradens (Unity party) refused to commit himself either way, saying the Economics Ministry did not have enough information about the incident.

On one hand, the VID seeks to fight the shadow economy, a goal that business representatives approve of, but, on the other hand, there is the right to free data flow, he said, in a classic piece of fence-sitting.

As reported, the State Revenue Service has decided to halt operations of, Latvia's largest classified advertisements website, as the portal refused to inform the revenue service about automobile dealers who had failed to register with the tax authority. The State Revenue Service earlier found that the website was being used for illegal business operations by persons buying and selling automobiles who had not registered with the revenue service.

Despite the website being officially shut down, visitors to that web address are automatically redirected to the domain, which appears to have identical content and is registered in Luxembourg.

Latvian Radio's Madara Fridrihsone reported August 8 that VID gained the power to block websites in 2008 but since then has only done so twice.

Meanwhile, the Director General of the VID Ilze Cīrule believes that the service has acted correctly.

"Lawyers of the State Revenue Service have evaluated this situation and are convinced that we are acting in accordance with the law. They certainly have evaluated all the details, because similar cases are definitely in play for us in relation to other sectors," said Cīrule.

While the VID does not have the right to request the closure of domains registered abroad, Cīrule is convinced that the removal from Latvian jurisdiction will not prevent the "ss" company witholding tax information.

"It should be noted that the general principles of monitoring web portals are very similar across the whole of Europe. Consequently, if we ask for such information, it is very likely that Luxembourg, which is where is now registered, will ask for exactly the same information and maybe even more information," said Cīrule.

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