Lenders will be required to inform the borrowers of payments

Lenders will have to inform the Good Finance Revenue about payments made by borrowers. The Cabinet meeting conceptually endorsed the Cabinet of Ministers’ draft regulation on the declaration of leasing, credit and related interest payments. It foresees that in the future the Good Finance Revenue (Good Finance Revenue) will be able to obtain information on payments made by borrowers in order to control the income and expenses of natural persons. It is also planned to limit the shadow economy in this way.

Eliminate the underground economy

Eliminate the underground economy

“Step by step, we need to take steps to consistently eliminate the underground economy. This is another way for the tax administration to promote true income and to limit the share of envelope wages that are detrimental to sustainable national growth and increasing well-being of the population, ”says Finance Minister Sean Cole.

From now on, leasing and credit service providers, except credit institutions, will have to submit annual information to the Good Finance Revenue on leasing or credit payments made by natural persons.

The information declaration will need to identify the person actually making the leasing or loan payment, even if that person is not the leasing or borrower concerned. Accordingly, in the case of leasing or loan repayments by a third party, the information document must include information on that third party paying.

According to data from the Good Consumer Protection Center, in February 2015, 56 SOEs received a special permit for providing consumer credit services. Manufacturers, vendors or service providers offering to pay for the purchase of goods or services in the form of deferred payment, a loan or other similar financial arrangement without the specific permission shall also be entitled to provide credit services.

Lenders will have to inform the Good Finance Revenue about payments made by borrowers

Lenders will have to inform the Good Finance Revenue about payments made by borrowers

Credit companies and leasing companies will have to submit a declaration of borrowers or lessees to the Good Finance Revenue (Good Finance Revenue), the  incharge told reporters on Tuesday.

Companies will have to submit such a declaration, which should include the name, surname, personal identification number of the borrower or lessee and the amount of payments made, to the Good Finance Revenue for the previous year by 1 February of the following year. In the case of a loan or lease taken by one person and paid for by another person, the creditor shall include in the declaration information on the actual payer of the loan or lease.

Cole explained that such a draft rule was designed to reduce the shadow economy in the country. If the borrower’s share of the expenses, including any loan payments or leasing payments, exceeds the amount of income legally obtained, the person will be invited to provide explanations, but if he or she cannot justify the means by which the property in question is acquired.

At the same time, banks will not have to provide this type of information. Cole noted that, given the initiatives in the Shadow Economy Reduction Plan, the Good Finance Revenue sees no reason to request this type of information from banks.

Thus, such declarations will have to be made by credit institutions that have a license issued by the Good Consumer Protection Center, as well as by companies that do not have such a license but which can purchase a service or product using the company credit facilities.

At the Ministry of Finance’s Communication Department, BNS told the government that the government had conceptually endorsed a draft Cabinet regulation on leasing, credit and related interest declarations on Tuesday.

“Step by step, we need to take steps to consistently eliminate the underground economy. This is another way for the tax administration to promote true income and to limit the share of envelope wages that is detrimental to sustainable national growth and increasing well-being of the population, ”said Finance Minister Rey Fernandez.

The ministry explained that the information declaration would have to include information about the person actually making the leasing or loan payment, even if that person is not the leasing or borrower concerned. Accordingly, in the case of leasing or loan repayments by a third party, the information document must include information on that third party paying.

According to data from the Good Consumer Protection Center, in February 2015, 56 capital companies received a special permit for providing consumer credit services. Manufacturers, vendors or service providers offering to pay for the purchase of goods or services in the form of deferred payment, a loan or other similar financial arrangement without the specific permission shall also be entitled to provide credit services.

Ensures accounting of tax payments and taxpayers

Ensures accounting of tax payments and taxpayers

The Good Finance Revenue is a subordinate institution of direct administration subordinated to the Minister of Finance, which ensures accounting of tax payments and taxpayers, collection of state taxes, duties and other mandatory payments in the territory of Latvia, as well as collects taxes, duties and other obligatory payments and handle customs matters. The Good Finance Revenue was established in 1993.