Analytics, Financial Services, Latvia, Legislation, Markets and Companies, Shadow economy

Companies' unreported financial data account for 40% of the shadow economy, Vejonis said in an interview with Latvian Television today.

Society and businessmen are part of this system, said Vejonis, reminding that the government was cooperating with business associations to develop new measures against the shadow economy that, he hopes, will be acceptable to both businessmen and the government.

Commenting on the situation at the State Revenue Service, Vejonis said the Revenue Service and its head Inara Petersone were under great pressure at the moment. It is up to Petersone to decide whether she can continue work in such circumstances.

Changes are necessary at the Revenue Service so persons who collect taxes are not involved in any illegal activities, added Vejonis.

As reported, according to the latest study on the Baltic shadow economies conducted by the Stockholm School of Economics Riga, the size of shadow economy contracted to 21.3% of gross domestic product in Latvia last year, but increased in Lithuania and Estonia.

Over the past year, the proportion of Latvia's shadow economy decreased by 2.2%. At the same time, the Lithuanian shadow economy has grown by 2.5% to 15% of GDP, and Estonia's shadow economy has expanded by 1.7% to 14.9% of GDP.