Tourism experts: shadow economy persists in accommodation

This summer, with increased demand for local accommodation, tourism industry experts told Latvian Radio July 23 that there is a problem with illegal market and no solution has yet been found.

Looking at the news feed of Facebook this summer, it appears that the stream of accommodation offers is endless - from campsites and guesthouses to private apartments and houses. 

Tourism industry experts said on an interview with Latvian Radio that while there is a fair share of honest taxpayers, there are also people who rent out their personal holiday homes for profit. Such a situation creates unfair competition, but no solution has yet been found. The industry hopes for a single accommodation register.

"Of course, before the crisis, we worked enough to make this whole segment in line with standards. I am not just talking about paying taxes, but about all the requirements that give the guest the feeling of safety,” said Jānis Pinnis, president of the Latvian Association of Hotels and Restaurants.

"With the crisis, priorities changed and, for the time being, fair work and paying taxes are on the individual conscience. Because the crisis hit the sector, we insisted that the Ministry of Economy devote additional efforts to creation of a single register," Pinnis said.

The Latvian Rural Tourism Association – “Lauku ceļotājs” – said that the private (and often unregistered) range of property offers is growing every year, and on the part of the state no attention is paid to this problem.

"Lauku ceļotājs" spokeswoman pointed out that the biggest problem with illegal business is not the taxes, but not being checked by all supervisory authorities, such as the Labor Inspectorate, the Food and Veterinary Service and others. Pinnis added that there was a problem with shadow economy in the tourism sector and that it created unfair competition.

He said that this was a sensitive issue that was not forgotten and was likely to come on the association's agenda next year.

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