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

BC, Riga, 09.10.2017.Print version
A private company in seven years has extracted oil worth more than EUR 5 million from a land plot belonging to a local government in Gudenieki county of Kuldiga region, western Latvia, without paying anything to the state or local government, according to Neka Personiga (Nothing Personal) analytical news program of commercial TV3 television on October 8th, cites LETA.

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.

 






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