Envelope payments could spark crack-down

  • 2007-06-06
  • By Talis Saule Archdeacon
RIGA - Before even taking the oath of office, President-elect Valdis Zatlers finds himself on the defensive as he tries to clear his name of massive tax avoidance after years of having accepted cash payments for his medical services. The practice is well-nigh universal in former Soviet republics, and to his credit Zatlers, who is one of Latvia's leading surgeons and former head of Riga's main emergency trauma hospital, immediately admitted to accepting such payments, though he said he never demanded them.

When asked candid questions about how much and from whom, Zatlers dodged giving direct answers. He did eventually admit that he didn't pay taxes on the cash, which by law is taxable personal income.
Roberts Putnis, executive chairperson of Delna transparency NGO, explained that for Zatlers, however, accepting such donations constitutes a more serious offense.
"He was not just a doctor who took money, but a public official leading a hospital. He had to at least declare the gifts even if he didn't need to pay taxes on them," Putnis told The Baltic Times.
"This could lead to conflict of interest issues with his issuing sick notes as well," Putnis said. "If he had taken money for this, then it will be a serious problem."

Krisjanis Karins, co-leader of the opposition New Era party, told TBT that he thought the corruption allegations would continue to haunt Zatlers throughout the beginning of his presidency.
"I think that it will be very difficult to get away from that. Actually I don't see how," he said.
The state revenue service initially released a statement that said doctors accepting donations of the sort in question was not, in fact, illegal. But, as Putnis explained, when Prime Minister Aigars Kalvitis and President Vaira Vike-Freiberga sat down to discuss the issue, they decided that Zatlers should have to pay the back taxes after all.
The state revenue service and the anti-corruption bureau released statements later that week contradicting their initial findings and condemning the practice.

Zatlers visited the State Revenue Service of June 4 to request information about the case against him and submit documents explaining his situation. He told members of the press after the meeting that he would now wait for their decision before choosing his next course of action.
The State Revenue Service has called on Zatlers 's and all doctors who have accepted similar payments 's to register such gratuitous payments for the past three years and settle the taxes. If he fails to do so, he would be subject to a fine of 500 lats (714 euros).

The head of the anti-corruption bureau, Aleksejs Loskutovs, said in an interview to Latvian commercial LNT television on June 5 that he believes doctors are not allowed to take the gratitude payments, and that there is a large difference between receiving a box of chocolate 's another widely used gift for doctors and nurses 's and an envelope full of money.