Analytics, Financial Services, Latvia, Legislation, Shadow economy, Wages
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Thursday, 25.04.2024, 02:33
Latvian FinMin: shadow economy would be curbed more efficiently if wages were not paid in cash
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MP Imants Paradnieks (National Alliance) has proposed a measure to fight shadow economy – restrict purchases of alcoholic beverages and cigarettes in cash. Paradnieks has asked the Finance Ministry to provide its opinion on the proposal and has asked for the opinion of a number of experts.
Reizniece-Ozola said that the ministry will review the proposal, but the minister herself is cautious about it, fearing a possible rise in sale of contraband products.
The minister believes that the proposal of commercial banks to introduce a requirement to pay wages to a bank account instead fo cash, is of a higher potential to fight shadow economy. "We will still discuss this proposal with social partners. In my opinion, it would curb shadow economy more efficiently instead of restrictions applying to a narrow group of products," said the minister.
As reported, the share of shadow economy in Latvia last year reached 22% of the gross domestic product (GDP), which is by 1.3%age points higher than in 2016, according to study "Shadow Economy Index for the Baltic Countries 2009-2017".
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