Government begins crack-down

The government of Prime Minister Einars Repse began its promised crack-down on corruption when it sacked the head of Latvia's state revenue service.

Andrejs Sonciks, director general of the State Revenue Service, was fired Nov. 26 upon recommendation of the Cabinet on the basis of reports that the revenue agency was not fulfilling its core task and that Sonciks was involved in shady deal involving customs guarantees for an oil-trading company.

Although state officials said the firing was temporary, Finance Minister Valdis Dombrovskis is expected to begin disciplinary action against Sonciks.

Sonciks, who came to the Nov. 26 Cabinet meeting prepared to report on ten-month revenues that he claimed exceeded expectation, said he was surprised by the Cabinet's decision and that the allegations being leveled against him are false.

Many insiders claimed that Prime Minister Repse had long wanted to sack the tax revenue minister, who has survived five prime minister and seven finance ministers.

Though technically Sonciks has been temporarily released on disciplinary grounds, Repse stated that he doubted Sonciks will ever return to his former position, even if he is proven innocent in the customs guarantees allegations.

Dinaz Nafta, an oil trader now known as SIA Agalas, was granted guarantees by the State Revenue Service even though the firm was burdened by outstanding tax debt and that management had been penalized 8 times last year for violations of customs procedures.

In addition, the Prosecutor General has accused Dinaz Nafta of VAT fraud.

Prosecutors have been looking into why the State Revenue Service canceled an excise tax debt of 4.5 million lats (7.6 million euros) on the basis of VAT refunds even though the company actually possessed a VAT debt of some 4.7 million lats.

Though Sonciks was firedpending the results of the prosecutor's investigation, insiders said that it was likely he will return to his post.

However, Repse's decision was not heralded in all quarters. Former Finance Minister Gundars Berzins said that the move to dismiss Sonciks was in the "interests of a narrow, narrow business group," adding that all those responsible for the Dinaz Nafta tax affair have already been exonerated.