Enhancing tax collection in Latvia

for the Ministry of Finance and the State Revenue Service

The Commission supported the Latvian authorities in their efforts to reduce the tax gap and to enhance public revenues.

Context

The Ministry of Finance and the State Revenue Service aimed to reduce the prevalence of tax fraud and to increase public revenues. This required an improvement in administrative capacity and the adoption of a structured and risk-based approach to tax evasion.

Support delivered

The Commission, in cooperation with the World Bank, provided support over a 3-year period to:

• Identify areas at high risk of fraud
• Train and empower the audit service
• Develop a comprehensive compliance strategy

Results achieved

Support from the Commission, in cooperation with the World Bank, delivered the following results:

• reduced the size of the informal economy in Latvia;
• improved taxpayer compliance;
• increased public revenues by 4% in real terms over 3 years.