Estonian VAT collection on par with Latvia

(Wikimedia Commons)
10/30/2015 9:48 AM
Category: Economy

In the first nine months of the year, the Estonian government had collected 1.4 billion euros in value added tax, only 260,000 euros less than Latvia, which has a far higher population and a higher tax rate.

Estonia has a population of 1.3 million people, roughly 700,000 people less than neighboring Latvia, where the VAT rate is 21 percent, one point higher than in Estonia.

Tax and Customs Board chief Marek Helm said the figures for Estonia are unbelievable, adding that VAT intake is up 11-12 percent, and the sum for the entire 2013 has already been passed, Eesti Päevaleht reported.

He said VAT collection is up 21 percent compared to 2013, adding that turnover or value added by companies has not increased by that much.

Helm said general economic growth and legal measures have played their part in the increase, but the predominant reason lies in a new requirement, in effect since November 2014, that all bills over 1,000 euros have to be declared to the Tax Board.

The breakthrough came due to both the state and private companies, which initially complained about the new requirement, Helm said, adding that many honest companies asked why they should spend time and energy on declaring documents. He explained that the measure helped map the economy and point towards those who avoid taxes.

J. M. Laats

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