Tax Agency Targets Bank Account Surges
Revenue Service Achieves Millions from Citizen Outreach
Latvia’s State Revenue Service (SRS) has successfully recovered millions in unpaid taxes by contacting citizens whose bank account activity significantly outpaced their declared income. The initiative, launched in September 2023, prompted thousands to regularize their financial affairs.
Targeted Communications Yield Results
In 2023, the SRS dispatched approximately 99,000 letters to individuals with substantial discrepancies between bank account turnover and known income. Approximately a quarter of recipients engaged with the service, leading to the declaration of an additional €9 million in capital gains and other income. Some individuals even received tax refunds after providing supporting documentation.
Baiba Šmite-Roze, Director General of the SRS, highlighted the positive fiscal impact. “Such an approach had a positive impact on the state budget – several million euros,” she stated, noting that this strategy significantly boosted state revenue.
Refined Strategy for 2025
For the current year, the SRS plans a more focused approach, reducing the volume of letters sent but targeting more specific demographics. The agency aims to address cases where financial activities demonstrably exceed declared income, learning from the previous campaign’s experiences.
Addressing Previous Campaign Challenges
Baiba Šmite-Roze acknowledged that the 2023 campaign highlighted resource limitations. “One of the biggest challenges was the lack of resources – the service could not provide sufficient support to all people who received letters,” she admitted. This led to some confusion among recipients regarding the processing of their responses.
Around half of those who received letters last year did not respond. The SRS intends to improve its communication and support processes, ensuring that individuals who had questions or concerns receive comprehensive information this year.
Focus on High-Value Discrepancies
The SRS prioritizes cases with the most significant financial discrepancies. Currently, there are approximately 20 ongoing investigations where the difference between bank account turnover and declared income exceeds one million euros. These larger cases receive specialized attention for evidence gathering and further clarification.
“The purpose of the service is not to punish the population, but to educate and remind them of responsibilities. This is especially true for people who may not be sufficiently aware or confused in a complex tax system.”
—Baiba Šmite-Roze, Director General of the SRS
For individuals who fail to respond to SRS communications, statutory procedures and penalties will be applied. However, the service emphasizes a proportional approach, assessing the intent behind any inaction.
The SRS’s campaign began in September 2023, with initial letters sent to those whose bank account turnover exceeded declared income by at least €20,000. Over 70,000 such cases were identified.
By November 2023, residents had voluntarily declared an additional €5.7 million in taxes, demonstrating the effectiveness of the SRS’s outreach. This success has been a strong motivator for continuing and refining the initiative.
In other financial news, consumer confidence in the Eurozone remains resilient, with recent surveys indicating a steady economic outlook despite global uncertainties.
