Revenue Service will have the right to block websites that do not meet legal requirements

RIGA - The Cabinet of Ministers today approved the Finance Ministry's proposal to give the State Revenue Service the right to block access to websites that refuse to provide information to the service.

The proposal is part of amendments to the Law on Taxes and Duties that will now be reviewed by Saeima.

The Finance Ministry points to the increasing digitization of the economy, when increasingly many business transactions are carried out through Internet websites and mobile apps. Taking into consideration that traditional tax administration methods are not always effective enough in the digital economy, the legal framework needs to be strengthened to control taxpayers who sell goods or services online, the ministry said.

The Revenue Service concluded after monitoring a number of websites in early 2017 that only a phone number and/or email was indicated on at least five websites. This is not enough to identify the business entity, therefore it is much harder for the Revenue Service to ensure that all taxes applicable are paid by the entity.

To that end, the amendments stipulate that the Revenue Service will have the right to take down the domain name in all cases when the supplier of goods or services cannot be identified.

The Revenue Service also saw that some websites sold goods that may not be sold online, for instance, liquor and cigarettes. Some of these websites, after fined by the Revenue Service, continued their illegal activity by changing contact information indicated on the website to contacts of a foreign company. Now the Revenue Service will be able to take such websites down.

The Finance Ministry emphasizes that the main objective of the amendments is to increase budget revenues and improve the business environment.