The Coordination Body for Countering Shadow Economy of the Government of the Republic of Serbia adopted a new Action Plan for 2017 and 2018 involving an increased number of measures and intensification of activities of line institutions on curbing illegal trade, unregistered labor and tax evasion.
The focus of the new Action Plan, now containing 107 measures, will be the establishment of more efficient supervision of shadow economy flows, improvement of the fiscal system and reduction of administrative burden to businesses and citizens. One of the new features are measures for strengthening the Tax Administration’s capacities.
"In order for the National Program to yield expected results, the following years will require dedicated attention to measures in the fields of fiscal policy, reform of para-fiscal burdens and the improvement of fiscalization. By implementing the National Program, the goal is to enact reforms and work on education and awareness-raising among citizens and the business community, as well as state officers, which will spur responsible behavior on all levels" – said the Minister of Finance, the President of the Coordination Body Dušan Vujović at the second extended session held in the Palace of Serbia.
The success of the ‘Get the Receipt to Win’ contest, that created great interest and public support for resolving problems of illegal businesses, also contributed to the increased number of measures in the Action Plan’s section dedicated to education.
"We have commenced activities on developing a series that would provide citizens with the most important information on shadow economy. We are also planning different forms of youth activities such as quizzes and social network contests, as well as via the uzmiracun.rs website. All of this will be an introduction to a new cycle of prize contests that are planned for fall, as the goal is to continuously direct attention during the ‘Years of Countering Shadow Economy’ towards this problem and motivate citizens and the economy to join the Serbian Government’s efforts" – announced Minister of State Administration and Local Government Ana Brnabić.
Considering the priorities of the Action Plan in the second part of this year, the President of NALED’s Fair Competition Alliance Goran Pitić highlighted that these will include the development of e-inspector software, which will harmonize inspection activities, as well as the implementation of joint trainings for prosecution offices and inspections for more efficient prosecuting and sanctioning of ‘grey’ businesses.
"During 2018, special prosecution departments investigating financial crime have been initiated, and cooperation with inspectors has been crucial in this endeavor. The business community expects systemic improvements in this field, considering the modest results so far in the dynamics of resolving cases and indicting individuals, so that the risk of illegal work is minimized" – said Pitić.
The Action Plan pays special attention to the most sensitive groups, youth and unemployed, beginners in business. In order to ease the process of starting a business and legal operations, the plan stipulates the introduction of incentives, as well as the amendment to the system of lump-sum taxation.
With the aim of improving fiscalization and expanding its reach, the plan also defines the plan of developing a new law on fiscalization, whose implementation will start in 2018 and would bring more justice in the market, reduce administrative and technical costs to the business community and increase efficiency in monitoring the VAT payments.
Today, the Coordination Body approved last year’s results of countering shadow economy, with a conclusion that the greatest contribution to better tax collection, which increased by RSD 122 billion compared to 2015, was the implementation of the National Program measures aimed at improving the efficiency of inspection bodies and Tax Administration. The VAT collection increased by RSD 37.5 billion (real growth of 7.8%), excise collection by RSD 29.8 billion (11.4%), and citizen income tax by RSD 8.3 billion (4.5%).
During last year, 245,392 inspection controls discovered 3,656 unregistered businesses. As a result of 53,069 conducted oversights, the Labor Inspectorate identified 19,472 unregistered employees, over 90% of which became registered afterward. Despite excellent results, it is thought that further activities are needed to resolve problems of informally employed persons whose numbers in the last quarter of 2016 reached 570,000, of which two thirds work in agriculture. With the aim of regulating their status, the Ministry of Labor in cooperation with the Ministry of Agriculture, NALED and line institutions commenced the development of a law on seasonal work in agriculture.
Significant results were also achieved in terms of strengthening tax discipline and culture. According to the data compiled by the Tax Administration for the first quarter, during which the ‘Get the Receipt to Win’ contest was performed, a 7.64% gowth in cash flow was registered by fiscal terminals, of which the greatest increase (33.84%) was seen with ‘small’ taxpayers among which ‘grey’ activities are most prevalent.
Citizens were encouraged to report cases of not receiving receipts, so the number of reports in the first quarter increased by 47.3% compared to the same period in 2016, particularly in March (88.55%). Additionally, tax inspectors identified a 25% decrease in improper issuing of receipts during controls and temporarily closed down a smaller number of businesses (decrease of 7.14%).
Development of the Action Plan was conducted by the Expert Group of the Coordination Body for Countering Shadow Economy of the Government of the Republic of Serbia, involving members of the Prime Minister’s cabinet, ministries of finance, construction, state administration, trade, economy, labor, justice, internal affairs, Tax Administration, Customs Administration, State Secretariat for Public Policy, NALED and Fair Competition Alliance.