It is often said that the Latvian Chamber of Commerce and Industry (LTRK), in which you are actively involved, is one of the few business organisations that the government, whatever it may be, actually listens to. Do they listen?

The feelings are mixed. I am not authorised to represent the views of the LTRK, but personally, I think they listen to entrepreneurs far too little. Yes, we are invited to work in various working groups, but... It seems the existence of these groups is for one reason only: to be able to say and emphasise – look – social partners participated in the decision-making or discussion of such and such an issue. This impression has been created and solidified after Krišjānis Kariņš's announcement that the decision on minimum social contributions would not be reviewed.

We often hear the opposite statements: “It is easier to see from Riga” or “What do you, there in Riga...”. Quite often it seems that those working outside Riga actually see the situation better. What is your opinion in Ventspils?

Every situation, every issue must certainly be viewed separately; otherwise, we are talking about the “average temperature in the hospital”. There are many processes and issues whose essence and details differ in large cities and municipalities, or parishes. For example, different average indicators to compare... If we analyse a situation in Riga or the Riga region and in the municipalities: the average indicator may be even very encouraging, but... Since my company provides outsourced accounting services, I form my view of processes in the country based on information about my clients. I have more than 100 clients, both large and very small; I think I see and understand the situation well enough. It has often happened that I have exchanged sharp words with both the Ministry of Finance and other officials. I have been asked: “Do you truly think that by looking at your clients, you see the situation more clearly than we do by analysing state statistical indicators?” Yes, that is so, I see better! Moreover, I know how statistical reports are created.

The territorial reform is almost, almost finished. How and does it affect the entrepreneur?

In our region, we encountered an attempt to merge the city of Ventspils with the Ventspils municipality. I was also an opponent of such a solution, and we managed to achieve the separation of the city and the municipality: Ventspils has been a large city and so it shall be. There are very different priorities in the rural territory and in the city. You cannot merge Riga with Eleja... The same was not planned for us, but something similar. I personally participated in the protests and – the result is there!

The reform's idea of a unified approach to municipalities was important to me, namely, the manager of a small parish must not be a tsar and a king, dictating rules according to their own mind and understanding. This thought was correct. The fact that this reform was carried out, mostly on paper, without delving into the situation in municipalities and cities... One cannot judge regional reform as good or bad – that would again be talking about the average temperature. Each situation must be analysed separately. I have seen many good examples and also bad ones, and it is not easy for me to provide a general assessment. The reform was necessary, but the devil is very well hidden in the details. Each municipality and city should be evaluated separately. In our case, in Ventspils, the issue of the separation of the city and the municipality was important because it affected, for example, heating and water tariffs. Ventspils municipality is one of the least populated in Latvia, the population density is low; the people of Ventspils, who are three times more numerous than the inhabitants of the municipality, would have to pay for the low population density of the municipality.

Has the Covid-19 period also pushed the people of Ventspils to live outside the city?

I would not say – outside the city, although remote work has been common. I am currently talking to you while in the office, but more than half of our employees continue to work remotely. Last year, in March, it was a shock to many, but in the autumn... We were among the first in Ventspils to announce remote work. The issue is very important: the ability to reorient, not a stubborn insistence on working only in the usual regime. One must change! I also see this well in my clients: many caterers reoriented to food delivery, many did not submit applications for benefits because there was no downtime. At the same time, there are companies, for example, large entertainment centres and large restaurants, that could not reorient and are still closed.

In Riga, one or two streets make one sad... Known names “disappear” under the sign: “To let”

The large companies in Ventspils have been able to reorient; as far as I know, none have closed completely. I have clients both in Ventspils (about half), in Riga (about 30%), and elsewhere in Latvia and abroad. Small shops had a very hard time, but thanks to state support, most have survived.

I also feel sad if I see my favourite places closed in Riga and realise that it is unlikely they will open again. But... Life is changeable, there were times when cars and aeroplanes appeared, and those who rode horses were no longer needed. Everything in the world moves forward and changes... In my opinion, this is how one should think and look at the situation.

In the spring of 2021, some, and in some places, quite sharply criticised those people who tried step by step to do something, to reduce restrictions. To do nothing and... to hope. What is at the basis of such a view: laziness, politics, or something else?

A mix of all the mentioned things. In the beginning, understandably, there is fear of the unknown, of what might happen. I believe: one must search for opportunities and ways to live and work in this regime that we have. This will not end tomorrow or the day after, but to sit for years and do nothing, to wait... I do not have an action plan, a recipe, or recommendations, but one definitely must do something, not sit!

How sustainable or forward-looking is the idea to criticise those who want to do things, and even very scornfully. For example, June is strawberry time, people in the regions are worried: there are berries, who will pick them? It has been “correct” for a whole year to sit at home.

To say: “doing nothing is good and right” – is neither a smart nor a sensible thought! One must do, one must act! Yes, it is easier to do nothing, sit at home, receive money and, lying on the sofa, grumble on Facebook “everything is bad anyway”! It is harder to go and do it so that it is safe and correct. If we do not act, humanity is doomed. One cannot and must not vegetate. I still encounter officials in my work who believe that money comes from an ATM, I apologise for this quote. Such a view is the consequence of the previously described situation.

What happened during the remote work period, especially at the beginning of the pandemic, in the spring of 2020? Who lived the best? Officials! Not entrepreneurs, who were forced to crawl through the eye of a needle so that their companies would live and continue to work. There is a big gap between the entrepreneur and the official, and the Covid-19 time deepened this gap.

In three interviews, three people associated with politics and business mentioned the same thing as you: there are people who seriously think that money appears in a bank account. From where this stupidity: lack of education, narrowness of knowledge, systemic convenience...

Such thoughts arise in everyday work and experience. I will specify – in the work and experience of officials. Within half a year, several of my friends and acquaintances have changed jobs and gone to work in the public sector – in the civil service. Everyone as one tells me the same thing: the thought before starting the job – to work and diligently. What happened? Entering the “bureaucratic wheel” of the respective office, everyone as one is strictly “put in their place”: “Like, this is how we work and that is how it is to be!” Until a few more generations change, such a situation, unfortunately, will persist. I want to say that specific people have become so deeply “entrenched” in the bureaucratic ease that it is difficult to change.

In your opinion, is it the bureaucratic ease of Soviet times or independent Latvia, if you are talking about so many generations...

Yes, that comes from Soviet times! It continues and cannot be changed in one, two, or even three generations. In my opinion, at least five generations must change. The system of the old days continues – the older employees teach the younger ones. Each younger generation becomes smarter and more erudite, but it cannot be changed so quickly. The consequences of the Soviet era are still felt.

In Latvia, it is clever to mention various numbers and indicators, GDP, indices, etc. What do you think is an accurate and understandable indicator for a person with which one could describe the country's economic situation...

I am closer to microeconomics. Indicators are a matter of macroeconomics. Looking from the point of view of small business, there is a good OECD study, which was carried out based on 2019 data; this image is very close to me. We see how large the payroll tax is at the same figures burden. We see that the Latvian and Swedish figures do not differ significantly. We are the most expensive in the Baltics, our tax burden is at the Swedish level. The best way to increase prosperity: to achieve the Swedish standard of living with such taxes. It is important that for one and the same euro we can get the same here and in Sweden. The LTRK motto – labour taxes must be reduced because we live at Swedish taxes, but we actually live in Latvia, which is not at the Swedish level. The situation in Latvia and Sweden differs: why do we pay the same taxes? Where do they go? The next step: finally, we must start talking about a zero-based budget. Not to collect more, but to spend less! If I remember correctly, there are 11 auditors working in the State Audit Office who control state institutions and their spending. The SRS (VID) has about 4500 employees who check money makers. So: 400 times more people check money makers than money spenders. One of the roots of the problem in Latvia, besides the shadow economy, is spending money. What, for example, happens in the public sector in December? Money is being spent in a hurry because “next year they might give less”. A zero-based budget would be a good solution to the situation.

Do they not understand this in the Ministry of Finance and the Prime Minister's office?

A good question, ask them! Obviously, they do not understand enough; if they understood well, the situation would be different!

“There is as much money as never before...”

Being Prime Minister, Krišjānis Kariņš sees the situation globally and conceptually. The question: how do those who issue, absorb, and coordinate this money see it? Do they have the same opinion? The impression arises that every official who has gotten to allocate and distribute money feels very powerful. To interpret, for example, the relatively loosely defined criteria for downtime benefits can be done in various ways. In my opinion, at the state level, there is a desire to provide opportunities, which bureaucratically turns into an interpretation: “how could we not give or give less”. In practice, I have experienced that the possibilities of receiving support are translated very broadly. For example, “you can work anyway, because your sector is not threatened”. The fact that the entrepreneur works with clients who cannot pay because the client's sector has stopped is not an argument for the official. The public (also the Prime Minister's) stance: it should not be like that, but in practice, a lower-ranking official decides, who thinks differently and is “saving state money”. The battle again is with windmills. Mr Kariņš does not see or hear this! In my opinion, many mundane and important trifles do not reach the top layer of politics.

State thinking or the lack thereof...

Not all people need to be at the same level. One will happily dig or plough the land, another will happily analyse documents, yet another will just as happily perform calculations in construction. Everyone has their own and true place. If we talk about the aforementioned, a saying in Russian would be appropriate: “From rags to riches”. Some in the civil service have an exaggerated sense of power, but acutely lack a broad vision.

Still the large volume of documents required by the entrepreneur. Why is it not reviewed or audited?

One of the reasons is the numerical ratio I mentioned: ten controllers of state institutions against thousands controlling entrepreneurs, where it is difficult to compete. I believe the State Audit Office works well. In my opinion, it should be given greater powers, for example, to punish an official who has done bad. That is not simple, because officials are protected by other laws. It is necessary to review the responsibility of the official. What happens if an official makes a mistake? In the worst case – they are fired from work; mostly, they are wagged a finger at or scolded. What happens to an entrepreneur who makes a mistake? The entrepreneur pays and pays, and pays again and... The level of responsibility is not proportional.

The road is difficult; I have participated in government meetings, talking about the understanding of what a tax should be – light, understandable, easily administered, and normally payable. A tax is something that, when starting a business, you clearly understand – you have to count on it! Upon reaching a certain level of business, one can start talking about the amount of the tax. I am a supporter of the micro-enterprise tax; I believe this tax has been unjustly maligned. When starting a business, the problem is the stack of papers and requirements, often not knowing what is actually needed. If the consultant does not explain everything, the new entrepreneur can have a hard time.

In conversations, entrepreneurs mention that it is impossible to fulfil all the requirements set for them

Only God knows absolutely everything. It is impossible to physically fulfil all the requirements. Over the last year, one must also take into account the variability of the requirements: in the morning you do not know what will be in the evening. Decisions tend to change by the hour, to understand all the requirements... It is not easy.

Changes in social tax: wrong time, uncertainty, there is very little time until July...

About the chosen time. Just now, just now after the downtimes and restrictions, entrepreneurs are starting to bustle and move. Is this the time for raising taxes? Completely wrong! A miss!

I am very angry, even furious about the situation that will “start” on 1 July! Last year, when the budget was adopted, it was said: let us not rock the boat, there will be a botched law, we will fix it. What is happening? For half a year in advance, an unpredictable situation is legally created for the employer. After half a year, one will have to pay for an employee who, for example, has long since stopped working for the entrepreneur. If there are three such employees, one can somehow manage. If there are 300? The “snowball” that can roll is huge.

Yes, of course, we are talking only about those employees who do not receive the minimum wage, but... we have many such entrepreneurs or situations. For example, small schools under the supervision of the Ministry of Education and Science, where teachers work who have low salaries and who work in several places. In a rural region, for example, a person has a household plot where they grow everything themselves; the small salary is enough. Yes, this situation affects not only entrepreneurs but also the state budget, because in state budget institutions there are also cleaners, janitors, other low-skilled labour. This has not been heard of, it has not been calculated. We waited until the last for the decision to change, it did not happen.

It is clear: every person must be socially insured. This is not up for discussion. The issue is about the chosen time and the desire to treat everyone by the same rule. On 1 July, much will change... For a business-starting entrepreneur the micro-enterprise tax will no longer be available. Talking about royalties, of course, one can say to a writer – go work in the civil service, but where should a low-skilled worker go? My clients also ask me: what to do? Should I lay off employees? Have the ministries evaluated the situation, how many part-time employees will be laid off? It is unlikely that the “hardened” non-payers of wages will now suddenly realise how badly they are doing and will start paying. This will not reduce the shadow economy by much.

Covid time – what has happened correctly and what very, very incorrectly

Let me think... Hmmm... One – we relied too much on the hope that the Covid situation would be short-term, we did not prepare for a much longer process. This was seen most sharply last year in the summer, when people relaxed, instead of working a lot and preparing for winter. I am worried that this summer will be similar, in the autumn the incidence will increase, and we will go in the same direction. To be ready means to find ways how not to close schools, how not to close companies. If we do not do this this summer and do not gain clarity, next year we will already be talking about two years of the pandemic.

The supports that the state paid were good! Yes, they did not pay everyone, but a large part were able to survive with this money! The accommodation was a very correct step, which, as I already mentioned, was spoiled by the “tsarist-era officials”.