Economics, Estonia, Latvia, Markets and Companies, USA

Minister of Economics Arvils Aseradens mentioned top priorities of combating shadow economy such as: improvement of business environment and attraction of investments, reducing bureaucracy and simplifying payment of taxes and improvement of control of construction process.

Deputy Director General of the Estonian Tax and Customs Board Rivo Reitmann described the ways how to improve tax collection and reduce shadow economy. As an example he mentioned VAT tax collection procedures and implementation of employment register, which reduced the tax gap around 7.1% of tax revenue last two years that constitutes 2% from GDP.

The shadow economy, which includes both tax and regulatory evasion, has a serious impact on Latvia's business environment, distorting the level playing field for companies big and small. It affects the state budget and endangers public safety. It puts a pressure on legitimate businesses and the public sector alike.

The panel of distinguished experts evaluated and recommended the most efficient tools and policy measures to tackle Latvia’s underground economy, in both its financial and regulatory aspects.