NALED: ‘Lower tax for flat-rate taxpayers’

In order to avoid the potential closure of businesses of flat-rate taxpayers or their moving to the shadow economy, NALED and the Digital Community submitted a proposal to the Ministry of Finance to amend the regulation on flat-rate taxation to extend the validity period of the capped monthly tax of 10%.

The initiative also contains another proposal – to change the method of tax calculation for flat-rate taxpayers doing business online, writes Ekapija.

As of 1 January next year, the amount of taxes for many flat-rate taxpayers in Serbia could increase several times. On that day, the provision of the Decree on Flat Taxation, which stipulates that the tax cannot go up by more than 10 per cent compared to the previous year, will stop being valid.

This change will come at a very inopportune time, at the time of the current political and economic crisis and high inflation, says NALED.

The aim of the initiative is to continue creating an encouraging ecosystem for the registration of new flat-rate taxpayers (usually small business owners and freelancers) and the survival of existing ones, of which there are more than 100,000 in Serbia.

“In order to maintain business in unstable times, it is crucial to ensure the predictability of tax obligations and stimulate the continuation of doing business legally,” says Ivan Miletić, president of the Fair Competition in NALED.

According to him, the proposal to change the tax calculation for part of the flat-rate taxpayers doing business online includes, first and foremost, foreign language teachers on online platforms and so-called virtual assistants, i.e. persons providing administrative services via the Internet (business activity codes 8559 and 8211).

It is estimated that as many as 39,000 people are engaged in this activity and less than 1% have a registered business. The key change in their taxation would mean that these two business activities would be treated as ‘location-insensitive’, i.e. the amount of tax would not be affected by the city or municipality where they are registered. Such a change would be important because foreign language teachers and virtual assistants earn between 70,000 and 80,000 dinars per month and two-thirds of them live in Belgrade, Novi Sad, Niš and Kragujevac.

The second amendment would entail a change in the multiplication coefficient of the tax base for these business activities. Codes 8559 and 8211 are among the top 80 by coefficient out of a total of 407 activities under the Decree on Flat Taxation. The reduction of the coefficient would also have the effect of lowering the tax burden and stimulate reporting.

(Blic, 04.10.2022)


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