Energy, Financial Services, Latvia, Legislation, Taxation
International Internet Magazine. Baltic States news & analytics
Thursday, 28.03.2024, 17:06
Private company is extracting oil from municipal land without paying taxes or duties in Latvia
At first oil
extraction in Gudenieki was explored by Alina company belonging to millionaire Peteris Smidre, but in 2009 he handed
over this business to his partners - Baltic
Oil Assets and Baltic Oil Management.
Citing report of the State Audit Office, Baltic Oil Management’s revenue from selling hydrocarbons reached EUR 750,000 last year,
close to EUR 1 million in 2015, and EUR 1.2 million in 2014. The company posted
loss in the past two years.
The State Audit Office discovered that the company has
enjoyed considerable privilege from the state. A decision was made in 2000 that
the state should receive 2-12 percent of the value of the oil that has been
extracted, while in 2009 the Economics Ministry and the government made a
decision that the company does not have to pay any duties to the state. The
state thus has lost EUR 133,000.
Sigita Pozelaite–Savluga, the owner of Baltic Oil
Management, said that her company is exploring extraction of
hydrocarbons, and the process is at the experimental stage.
Chief Auditor Elita Krumina in an interview with the
TV program was wondering how long exploration could take, and at which moment
it should be qualified as a real extraction.
Environment Protection and Regional Development
Minister Kaspars Gerhards (National Alliance) told the TV program that
last year this issue had been discussed within the sector, but representatives
confirmed that the extraction is not happening on an industrial level yet.
Meanwhile, Economics Minister Arvils Aseradens (Unity) said that the situation that a private company under the
cover of exploration has been extracting oil for several years and not paying
taxes for it is not right. He also said that legislative amendments are being
prepared to solve the problem.