The head of the State Revenue Service (VID, SRS), Baiba Shmite-Roke, stated that the requirement to indicate the origin of funds is not aimed at increasing tax collection, but at combating the shadow economy and creating a fair competitive environment.
The Director General of VID, Baiba Shmite-Roke, stated in the program "Naudas cena" on TV24 that the requirement to indicate the origin of funds is not aimed at increasing tax revenues. Commenting on measures to limit the shadow economy, the head of VID reminded that working groups were established in 2023 to develop proposals to reduce its scale. According to her, the initiators of these ideas were mainly the entrepreneurs themselves, and the service proposed to introduce a requirement to indicate the origin of funds.
"What is the shadow economy? This should concern the entire Latvian public. People are worried because the 'shadow' is too large — the budget receives less income, and something needs to be done. Businesses are concerned because the shadow economy undermines fair competition. The state is worried because society is worried," Shmite-Roke explained.
She emphasized that indicating the origin of money does not aim to increase tax revenues. "No! The main thing we need to change in our thinking is the desire to create a fair and transparent competitive environment for entrepreneurs. Through this, we can stimulate revenue to the budget," noted the head of VID, adding that limiting the shadow economy will inevitably make Latvia richer.
It was previously reported that starting from January 1, 2025, VID will intensively monitor cash transactions, receiving information about deposits into ATMs exceeding 750 euros and withdrawals exceeding 1500 euros per month. "Our goal is to effectively focus on groups at risk of the shadow economy to quickly identify suspicious transactions. Honest taxpayers who legally use their funds will hardly feel these changes in their daily lives," Shmite-Roke explained earlier.
She added that VID does not associate specific amounts with tax evasion: "We have algorithms that allow us to distinguish when a person is simply depositing their legal salary and when transactions may indicate possible tax evasion."
It was previously reported that new construction regulations will come into force in Latvia starting November 1: now, when submitting a project to the Construction Information System (BIS), it is necessary to indicate the source of funding. This rule will affect everyone planning construction or major reconstruction.
