Estonia is a country with a smaller population and a smaller Tax and Customs Board (equivalent to Latvia's State Revenue Service), but it manages to collect a "fatter" state budget than Latvia by almost €3 billion, according to publicly available data on both countries' revenue services and budgets.
In an interview with LETA in early June, SRS Director General Ieva Jaunzeme said that due to low salaries, staff turnover at SRS is around 10% per year, while IT staff turnover is as high as 26%. According to her, the minimum amount needed to raise salaries would be around six million euros a year, while last year the government allocated only 2.5 million euros of the eight million euros requested by the SRS.
"We do not recruit civil servants. We recruit tax consultants, financiers, lawyers, etc. All these jobs have analogues in private business. We also found, after comparison, that there is a huge pay gap for positions such as financial analyst or lawyer," explained Jaunzeme.
Alongside the desire to increase salaries, for example, the SRS website provides information on the success of the SRS in fighting the shadow economy. The media also occasionally reports on the exposure of various tax cheats. It is reported that the SRS is now in its ninth year of assessing the "tax gap". The "tax gap" is the amount of tax that taxpayers do not declare or, if they do, do not pay to the state budget. The latest VAT gap study by the SRS shows that the VAT gap continues to decrease and the last two years - 2020 and 2021 - show the same positive trend. This creates a public perception that the SRS is doing an increasingly better job, all under very difficult circumstances.
Publicly available data show that, at least in Estonia and Latvia, the salaries of the heads of the SRS are quite different. The public official declaration available from the Latvian SRS shows that the Director General of the SRS received on average €3,526.52 per month before tax in 2021. At the same time, according to data compiled by the newspaper and news portal postimees.ee, her counterpart in Estonia, Raigo Uukkivi, Director General of the Estonian Tax and Customs Board, currently receives on average €6,900 per month before tax. According to postimees.ee, the highest salary among civil servants in Estonia is paid to Kaido Padar, Director of the Estonian Transport Administration (equivalent in Latvia to State Secretary of the Ministry of Transport) - €7,500 per month. His Latvian counterpart, Ilonda Stepanova, State Secretary at the Ministry of Transport, received an average of €5,408.22 per month last year.
The fact that the salaries of Latvian SRS employees were not particularly high last year is also confirmed by the declarations submitted by other SRS officials. For example, Inguna Salaka, Head of the First Division of the Customer Service Department of the Tax Administration in Riga, received an average monthly salary of €1,792.54, while Inese Bule, a Tax Inspector working under her, received only €999.49. Inga Brutāne, Director of the Legal and Pre-trial Dispute Handling Department of the SRS, received an average of €4,207.57 last month, Atis Bičkovskis, Head of the First Litigation Department, received €2,271.46, while Anatolijs Bleive, Chief Lawyer working under her, received only €1,737.94 per month.
One of the comparable indicators for tax collection authorities is the number of officials and staff they employ. The question is: how many employees are needed in Estonia to collect the lion's share of the €13.13 billion revenue planned in the 2022 State Budget from 1.3 million citizens, and how many employees are needed in Latvia to collect the lion's share of the €10.70 billion revenue planned in the 2022 State Budget Act from 1.8 million citizens?
The Estonian service's website publishes the full names, telephone numbers and e-mail addresses of all its employees. Adding up the total, there are 1,049 officials and employees in the Estonian SRS. Adding up the number of employees listed in the document "Information on the monthly salary of State Revenue Service officials and employees by job group from April 1, 2022" published on the Latvian SRS website, the total number of employees in the Latvian SRS is 3,850 - almost four times more than in Estonia.
The conclusion is that legal and private persons in Latvia are more reluctant to pay taxes and therefore more tax collectors need to be brought in, or that the tax collection system itself in Latvia is difficult to administer for both the payer and the collector.
As the publicly available data may prove to be inaccurate, Neatkarīgā addressed clarifying questions to the Director General of the SRS, asking how many employees are currently working in the SRS; by how much should the salaries of SRS employees be increased, as well as asking other questions. Jaunzeme told us that "we will provide answers within two weeks".