Latvia: Huge shadow economy in car service sector: association

The shadow economy accounts for up to 90% of the car service sector in Latvia, which has completely distorted competition, Andris Kulbergs, board chairman of the Latvian Automotive Association (Auto Asociacija), told LETA. The total turnover of the shadow economy in the sector amounts to almost EUR 200mn per year, the association estimates. The state lost EUR 135mn in VAT revenue and EUR 58mn in personal income tax revenue and social security contributions in the car repair sector in 2022. Compared to 2020, the grey economy in the sector has grown by 25%, the association calculated. The organisation called for the introduction of a voluntary certification system for garages.