Entry in a public register for greater transparency of local non-tax duties
Local non-tax duties are listed in more than 400 decisions, and the amount of a fee for a plea, request, proposal or application in different cities and municipalities varies between 20 and 300 dinars. For the system to be more transparent, it is necessary to include all taxes in the public electronic register of duties, adopt a methodology for determining their amount, adjust the amounts to the real cost of the provided service, but also merge or rename individual fees, it was concluded at today's presentation of the Analysis of local non-tax levies.
The results were presented as part of the "Month of Parafiscals" campaign, which is being implemented by Partner Solutions, NALED, KPMG and the Mihajlo Pupin Institute within the Non-Tax Reform Project, with the financial support of USAID. The sample analysis of local governments showed that the average amount of a fee is 7,500 dinars, while their number ranges from 10 in Ruma to 144 in the municipality of Knjaževac. The highest amounts are paid for procedures related to fulfilling the conditions for performing activities (40,500 dinars), and in the field of urban planning and construction (17,000 dinars), while the lowest cost refers to registration and issuance of certificates from a register (800 dinars).
- Kragujevac has a total of 53 prescribed administrative fees that generate revenues in the amount of 6.5 million dinars, or about 0.1% of the city's revenues. Utility fees are more important for the city, for example, the revenues based on signage fee in Kragujevac in 2020 amounted to more than 150 million dinars, and the income from the fee for keeping motor, road and trailer vehicles was 92 million. By forming a public register, local governments would collect their levies more easily, the Ministry of Finance would have better control, citizens and businesses would know what and why they are paying - said the mayor of Kragujevac, Nikola Dašić.
Not every prescribed fee is parafiscal. As mentioned during the round table, parafiscals are levies whose amount is higher than the costs incurred by state and local authorities in providing the service, or levies whose nature is more similar to a tax than a fee, as determined by the Law on Budget System.
- Parafiscals usually appear through high and different prices of the same public services or different tariffs for individuals and legal entities, so the same request in Bajina Basta will cost citizens 2,000 dinars, as opposed to 3,000 for businesspeople. Decisions on these fees and price lists of local public companies are often not available nor easily searchable, and their comparison is made more difficult by the fact that some of them were last updated in 2011. That is why we suggest that for a start, all local administrative fees, as well as republic fees, be classified according to areas, and then that each competent body enters the fees in their jurisdiction into the public register - says Project Manager at NALED Jelena Rančić.
Revenues from local administrative fees account for an average 0.2% of the total revenues of cities and municipalities, and equalization of the amount for the same action or procedure between different local governments would not significantly affect their level of revenues. On the other hand, introducing order in the fee system is of great importance for citizens and businesses who pay these fees and can contribute to the improvement of living and working conditions in local communities.
Assistant Minister of Finance Dragan Demirović pointed out that a step forward was made with the adoption of the Law on Charges in 2018, which regulated the great diversity among different charges. "The next step would be to regulate the fees, but taking into account all aspects of the problem. We will see how many local fees exist only on paper, which may not be collected by local governments and have no fiscal significance. As for the register itself, it requires prior adjustment of regulations, and although we cannot know now what the final form will look like, we are ready to work on a common goal, which is to achieve transparency of the system of non-tax levies" said Demirović.
