Tax administration is the interconnected complex of processes, the aim of which is to provide full, duly and fair collection of taxes and duties according to the tax laws, which also includes registration of tax bearers, the account of tax incomes, the tax control, collection of tax debts and rendering consultation to tax bearers. The penal system should be effective from the point of taxes collection, should discipline tax bearers and at the same time it should be proportional to the violation committed. Essence of tax administration is to bring up law-abiding to the tax laws. Efficiency of tax administration is an essential factor in realization of financial policy. It is necessary to develop and realize the strategic plan of increase in efficiency of tax administration activity in Latvia.