New president hopes for an end to his taxing times

RIGA - Latvian president-elect Valdis Zatlers has been ordered topay a 250 lats (355 euro) fine for providing incomplete informationin his income declaration.

Zatlers, due to take office on Sunday July 8, told journaliststhat he has settled his issues with the State Revenue Service andthat according to their findings he has no outstanding taxliabilities.

Speculation had been rife that Zatlers had evaded tax in connection with undeclared payments he acceptedfrom patients while working as a surgeon.

The incoming president admitted that the process had been anunpleasant sideshow during his run-up to power.

Zatlers further said he would closely follow the work of a HealthMinistry task force that has been established to look into the issueof "gratitude" payments to medics, and voiced hope forlegislative amendments to clarify precisely what should be includedin income declarations.

"The greatest problem is that the public is dissatisfied withthe revenue service's findings. People will be satisfied only whenlaws are amended by clearly stating which income must be declared,"Zatlers said.

Asked about the lessons he has drawn from the controversy, Zatlersmused: "It is necessary to be active when facing a problem, it isnecessary to go to the people and speak about it loudly."

Zatlers said he was glad that he has been heard at last, because,in his words, he had been telling politicians about the "gratitude"issue for years.

The Latvian State Revenue Service ultimately concluded that theextra payments Zatlers received from his patients while working as asurgeon, are not liable to taxation. In a letter to thepresident-elect, the tax authority said that an annual incomedeclaration must be submitted if the total non-taxable incomereceived during the year exceeds fourfold the non-taxable minimumincome set for the respective year, in Zatlers' case 1,248 lats in2005, 1,536 lats in 2006 and 2,400 lats in 2007.

"Considering the above information you must assess your incomeand submit the annual income declaration if necessary," the taxauthority said in its letter.

The issue of undeclared extra payments to doctors was raisedalmost as soon as Zatlers' nomination for the presidential post wasdeclared. After he was elected Latvia's new president, Zatlers askedthe tax authority to analyze the situation and recommend furthersteps he should take.