1. Development of Road Haulage market: challenges and opportunities author of the presentation Oskars Juhnevics

2. According to statistics, transportation and logistics branch in Latvia makes approximately 6% of GDP. Due to it’s geographical position, Latvia is an important area connecting EU, Russia, Belarus etc. Important indices of Transportation and warehouse branch LVLTEE Sector contribution to GDP5.9%4.6%5.1% Number of companies5 3877 2643 861 Turnover (mil. EUR4 4855 3974 143 Number of employees77 55699 66740 257

3. Freight traffic – export services. The company in Latvia gains investments from EU and Russian Federation. This dicreases unemployment and makes additional taxes to the state. Turnover 1st quarter of 2011(mil. tonn km). LVLTEE Freighting mil. t/km10 59019 3985 611 Import (mil. EUR)8 74517 6509 242 Eхport (mil. EUR)7 15815 7168 753

4. 1. Problems in freight traffic sphere:  Non organized infrastructure There are 200 laybies in Latvia, only 6 parking places are functioning. Parking places are bad equipped. Basic things are absent (toilets, shower, security, water)

5. Tax rates are far too high. Road tax is very high (in Lithuania and Estonia this kind of tax does not exist) Road tax for the vehicles Ls / year Type of the vehiclecarbiaxial lorryhalf-trailer Technical specifications of the vehicle: gross weight 1950kg Gross weight > 15000kg X Pneumatic suspension X 120 Mechanic suspension X 195180 Year: till 2005 90 X X Year: after 2005 75 X X

6. Proof of technical inspection in Lithuania is more advantageous than in Latvia Proof of technical inspection of the vehicle LVLT annualх Once in 2 years х Technical specifications carlorrycarlorry The first roadworthiness test of the vehicle: petrol16,47 Ls29,63 Ls 8.57 Ls 16.73 Ls diesel19,63 Ls33,54 Ls 8.57 Ls 19.59 Ls Petrol/gas18,06 Ls 31,59 Ls 8.57 Ls 22.64 Ls Repeated test of the vehicle: petrol8,89 Ls 15,47 Ls 8.57 Ls 10.61 Ls diesel10,47 Ls 17,42 Ls 8.57 Ls 14.69 Ls Petrol/gas9,69 Ls 16,45 Ls 8.57 Ls 17.45 Ls

7.  The competition among the companies in of other countries is not fair Fines for the lorry drivers in Latvia are higher than in Lithuania Fines for working and rest time defaults Default Fine for the driver Fine for the company Fine for the driver Fine for the company LTLV Not to stop driving after period of 15- 30 min to 10LVL- 50-150LVL more than 30 min, but not more than 1 hour 20-40LVL-30-50LVL 50-150LVL more than 1 hour, but not more than 2 hours 40-60LVL-50-100LVL50-150LVL more than 2 hours, but not more than 3 hours 60-100LVL-50-100LVL50 - 300LVL

8. Excise. Slovakia returns the excise to local companies – 10 Euro cent for 1 liter. There is no contract with Russia to avoid double tax adjustment. In Lithuania this contract is already working.

9.  Not organized and disadvantageous system of salary and subsistence allowances for persons outside Latvia.  The tax rate of a year is approximately 15+15=30%.

10. 2. Oportunities.  Parking and recreation places for the drivers will be equipped according to all EU rules. After calculation of the traffic flow, it will be possible to find where and how many parking places are needed. 2.1. The project will help to solve following problems :

11.  Roads will correspond the EU rules. Drivers will have a chance to avoid populated places.

12.  There are no tax allowances connected with selling old cars and buying new. (the tax rate of the car sold is 15% for the reinvested income. 2.2. The solution of the following questions must be found! :  It is necessary to cancel the advance payment for the companies.

13.  Building equal conditions for foreign and local companies.  Perspective of allowances for local businessmen.  Advancement of traffic among the big port-cities of Baltics and transit roads. Rezekne – Kaunas, Panevezys – Daugavpils, Liepaja – Klaipeda, Siauliai – Jelgava, Riga – St. Petersburg, Kaunas – Riga, Vilnius – Riga, Riga – Daugavpils, Riga – Liepaja, Riga – Ventspils etc.

14. 3. Activity complex : (opportunities)  Reconstruct and widen the roads (most important roads will have 4 lanes).  Competitiveness of the transportation in Latvia must be raised.  Improve the infrastructure of road haulage. Capacity of traffic and speed must be increased.  Improve parking-places to make the correspond EU rules.

15.  To make tax allowances to local companies in order to buy new vehicles.  Penalty amounts will be made according to conditions.  To adjust penalty amount to the means of the Baltic States.  To create a law to protect local road transportation companies.

16.  Develop infrastructure and renovate the existing ports. Build new ports.  To change the system of double tax rates for the fuel: excise and VAT.  Develop and finish the agreement with Russia to avoid double tax rates.

17. Thank you for your attention !