“Rīgas satiksme” will use its statutory rights to appeal the decision taken by the SRS
According to the public information, “Rīgas satiksme” received a tax surcharge of 13.2 million euro from the State Revenue Service (SRS) in an audit case for the period from January 1, 2016 to December 31, 2018. “Rīgas satiksme” will appeal the decision of the Director General of the SRS to the Administrative Court to ascertain its validity and whether the tax law norms have been applied correctly. Dzineta Innusa, Chairman of the Board of “Rīgas satiksme”, “The priority is the common interests of the enterprise. Since 2019, the company has started and has been working significantly on the implementation of good corporate governance processes. Furthermore, work is being continued to prevent the activities ascertained in the SRS audit at present and in the future. Despite the work already done, we still have to reckon with the consequences of the decisions made in the past, which have had an impact on “Rīgas satiksme” today. In this audit case, we have very carefully assessed all the ascertained violations and also provided all the evidence to the SRS. Using the rights provided by law, we have decided to appeal the decision so that it has the least possible impact on the company’s operations and reputation as a whole. “Rīgas satiksme” is also financed from the taxpayers’ money and we do not want the company to suffer additional losses caused by insufficient diligence in connection with the transactions analyzed in the SRS audit. The overall financial position of “Rīgas satiksme” is stable and the company will provide its services as before.”
The SRS performed a tax audit in “Rīgas satiksme” for the period from January 1, 2016 to December 31, 2018. In the course of the tax audit, the accounting documents, cooperation agreements, settlements made during this period as well as other documents were audited. As a result of the audit, the SRS concluded that several violations took place, which is the reason for the surcharge of the value added tax and corporate income tax for the total amount of more than 13 million euro.
The SRS also found violations in the contractor’s agreements with physical persons on the provision of consultations. In this part, “Rīgas satiksme” considers the decision of the SRS to be justified and will not contest it. The company has already filed a civil lawsuit against the former Board of “Rīgas satiksme” for damages incurred to the company.
In order to change the previous corporate governance practices, as early as the beginning of 2020, many cooperation agreements and various expense items were revised and terminated, with significant cost reductions. At the same time, work has begun on a new ticketing system that will replace the existing one.
Since 2019 already, “Rīgas satiksme” has started working and has been performing significant work on the implementation of good corporate governance processes. The company has significantly changed its procurement and contracting procedures to make the process transparent, understandable, fair and non-distorting the market. When concluding purchases and contracts, careful work is done on the selection of the cooperation partners so that the purchased goods and services are received at the most advantageous price. At the same time, “Rīgas satiksme” has worked and continues to work on the termination of economically unprofitable contracts, which in general has resulted in the fact that “Rīgas satiksme” managed to close 2020 with a profit of almost 1 million euro. Despite the work done, the consequences of the past decisions, which have had an impact on the 2020 budget, are still to be reckoned with, given that a fine of 2.4 million euro imposed by the Competition Council has been paid. There are also a number of ongoing criminal proceedings under investigation. Thus, the consequences of the past decisions also affect the results of this and the coming years.
For communication with “Rīgas satiksme”, we encourage you to use the information telephone 20361862, or send an email to info@rigassatiksme.lv. Furthemore, you can contact the enterprise on the website www.rigassatiksme.lv in the section “Contact us”, where anyone can submit an application electronically.
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