The huge grey zone in the automotive services sector / Article

The association claims that in 2022, the state budget lost €135 million in value added tax and €58 million in personal income tax and social security contributions in the car repair sector.

Compared to the results of the 2020 study, the grey zone in the garage sector has increased by 25%, the association sums up.

The association sees a solution in introducing a voluntary certification system for workshops, which would enable the development and implementation of common standards for this sector on a national scale.

Andris Kulbergs (AS), chairman of the board of the Automobile Association and member of the Seimas, points out that workshops in Latvia operate in two different realities – those that try to work honestly and those that operate “outside the law”.

“For years, as much as 90% of the grey zone in the workshop sector has completely distorted competition, which has resulted in companies not being able to develop, almost all chain companies leaving the market and no new ones emerging, because honest work is practically impossible. To solve this huge problem, it is not enough to punish workshops, but there must be an effective state solution to make honest workshops more competitive,” Kulbergs said.

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