Latvian road transport associations demand road tax postponed

Latvian road transport associations have drawn up a letter objecting to the pending introduction of road tax in Latvia, demanding that the road tax be put off until 2016, and warning that if the associations' demands are ignored, massive protests may follow, writes LETA.

Sector representatives told the business portal that the Transport Ministry's amendments to the Law On the Toll for the Use of Motorways were drafted without taking into consideration domestic road transport companies' opinion. "Should this opinion be ignored, transport companies are prepared to organize major protest campaigns involving trucks and logging trucks, similar to the protests of 2011," says the association's statement to the media.

The letter, signed by the heads of Latvian Association of Independent Timber Harvesting Companies and Latvian National Association of Haulers, has been sent to the prime minister and ministers of transport, finance and agriculture.

The letter says that the associations categorically object to the latest amendments to the Law On the Toll for the Use of Motorways. The associations indicate that, according to the law, 100 percent of vehicle operation tax revenue and 80 percent of revenue from excise tax on fuel should go to the national highway fund program. However, in 2012 and 2013 only 20 percent of vehicle operation tax revenue and about 8 percent of revenue from excise tax on fuel were channeled to the fund. This means discrimination of taxpayers that pay these taxes, says the letter.

Likewise, the letter refers to Transport Minister Anrijs Matiss' recent statement in an interview with the "Kapitals" magazine, him saying that, according to statistics, 85 percent of trucks that weigh more than 12 tons and are operated in Latvia never leave the country. This means that, if the road tax is adopted, it will have a minimal effect on the transit industry, while the local companies will have to carry the financial burden caused by such a tax.

"Clearly, such additional tax would damage road transport companies' competitiveness significantly," says the letter, adding that it would subsequently also affect the related industries in Latvia, including agricultural producers, logging companies and others. The letter also emphasizes that the unsatisfactory condition of the roads in Latvia, especially in the regions, means faster wear and tear of vehicles employed by the association's members – and therefore higher costs.

Because of this, the associations propose that the road tax be postponed until January 1, 2016 – or until the national highway fund program receives no less than 100 percent of vehicle operation tax revenue and no less than 50 percent of revenue from the excise tax on fuel.

The associations also offer a few other proposals regarding tax application and tax amounts, and say they wish to develop constructive dialog with the relevant ministries and government institutions. If their opinion is not taken into consideration, the associations may organize massive protests and use trucks to block roads.

As reported, on August 20 the government supported in principle the Transport Ministry's proposal to introduce road tax as of July 1, 2014.


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