07/05/20

EUROPE: Offshores to be excluded from list of state support recipients during state of emergency.

As published on bnn-news.com, Wednesday 6 May, 2020.

On Wednesday, 6 May, the work group led by Finance Minister Jānis Reirs supported a proposal from the National Alliance All for Latvia-For Fatherland and Freedom/LNNK (VL–TB/LNNK) to deny offshores or businesses registered in low tax or tax-free countries and territories access to financial support provided by the Latvian state during the COVID-19 pandemic.

The work group supported the political party’s proposal to exclude from the list of recipients of guaranteed state aid contenders that are legal persons registered in offshore territories. The same applies to associations that are Latvia-based legal persons the owners of 25% of shares in which are offshore-based legal persons or associations.

Offshores are considered countries as outlined in the framework of the Law on Public Procurements.

Previously VL-TB/LNNK explains that approximately 17% of Latvia’s total GDP consists of public procurement. Considering those are taxpayer funds and during the state of emergency the entire society will be responsible for state investments through tax benefits and other financial instruments. With that in mind, the party believes it is necessary to ensure transparency and fair use of this money.

"We cannot use state funds to support dishonest businesses and businessmen who have avoided supporting the country until now, sustaining themselves off offshore systems and tax optimization," explains the National Alliance’s politician Rihards Kols.

He also said providing support to companies based in offshore territories would be a wrong and ‘fundamentally unfair’ step that could potentially dissuade others from paying taxes.