Latvia's biggest tax debtors found in furniture manufacture and catering sectors - bnn-news.com

The highest proportion of tax debtors in Latvia is found in furniture manufacture and public catering sectors, according to a study performed by Lursoft.

The study reveals that the total size of tax debts of companies reaches EUR 611.75 million and more than 39 000 are found amount tax debtors in the country. This means one-fifth of companies in Latvia have problems with tax payment discipline.

The situation with tax payment is reportedly the worst among companies that manufacture furniture – tax debts have been registered among 46.96% of companies in this sector in the past half-year. Based on data provided by the State Revenue Service (SRS) Lursoft calculated that a quarter of companies that manufacture furniture have been on tax debtor lists for six consecutive months. The total tax debt of this industry is close to EUR 3.7 million.

The proportion of tax debtors in Latvia’s catering sectors is nearly as high. Tax debts that reach at least EUR 150 have been registered for 46.39% of participants of the industry.

Lursoft concluded that the catering sector has one of the worst tax payment disciplines, looking at the ratio of tax debtors among companies registered in the industry.

Looking at the dynamic of the number of tax debts, it can be observed that the total number of debtors has increased slightly in spring months. In May, when compared with December 2018, there were 6.88% more tax debtors, whereas the total tax debt amount had increased 8.13%, reaching EUR 28.85 million in May.

Lursoft’s study reveals that the proportion of tax debtors exceeds 40% in sectors engaged in the manufacture of non-classified machinery, mechanisms and specialised machinery, and for the construction of buildings and non-specialized construction work. Lursoft has calculated that the tax debt of sectors that manufacture non-classified machinery, mechanisms and specialised machinery has increased 18.35% over the course of six months, reaching EUR 1.82 million. This industry has a total of 296 registered companies.

At the same time, data shows that these sectors are not in the lead tax debt-wise. Lursoft has calculated that the most rapid tax debt rise was observed for the industry that combines labour force search and personnel selection. This industry has 561 registered companies. 176 of them have had tax debts that exceed EUR 150 in the past six months. In the six-month period the size of the debt has increased 42.19%, reaching EUR 2.97 million last month.

The tax debt volume in the radio and television programme development and broadcasting sector was several times below that of companies engaged in labour force search. However, the total increase in the past half-year period still demonstrated considerable growth. Tax debt growth has also been observed for companies engaged in other kinds of manufacture, including jewellery, costume jewellery, musical instruments, sports goods, toys and game manufacturers. In the six-month period, the industry that unites 685 companies had experienced tax debt increase to EUR 719 980.

At the same time, the study concluded that there are also other industries in which tax debts have declined in the last six months. This applies to industries that manufacture computers, electronic and optic equipment. In six months, this industry’s tax debt dropped from EUR 501 360 to EUR 382 350, which is a 23.74% decline. A similar result is noted for producers of beverages, whose tax debts reached EUR 1.14 million six months ago, but have since dropped to EUR 886 050.

The biggest tax debt at the moment is registered for wholesale trade sector in which 3 333 businesses out of 12 600 had tax debts last month. The total tax debt of the industry reaches EUR 125.80 million. In the past half-year, this industry’s tax debt volume has increased 12.78%. Second place tax debt-wise belongs to storage and transport assistance industry, in which tax debt of companies reaches EUR 47.58 million. A quarter of the 19 270 companies registered with this industry have debts that exceed EUR 150. The total tax debt amount reaches EUR 40.86 million.

Lursoft study used information from the period between 7 December 2018 and 7 May 2019. This study analyses companies whose tax debt, based on information from SRS, exceeds EUR 150.

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