The National Alliance for Local Economic Development (NALED) is putting together a third registry of parafiscal and non-tax dues for the Serbian Finance Ministry and will propose reforms to reduce the burden on businesses.
“NALED will put together a register of parafiscal and non-tax dues and urge for the definition of the criteria that would determine the amount of tax as a real cost of the state administration to determine if the cost corresponds to the quality of the service,” NALED’s head of PR, Ivan Radak said.
He added that, quite frequently, payment of tax does not guarantee a provision of service.
The register of parafiscal levies, which is being created together with the US Organization for International Cooperation (USAID), should prevent the state authorities or the local community from introducing new taxes for businesses at their discretion.
Radak said that NALED estimated that there were several thousand state and local taxes and dues in Serbia, with 384 non-tax dues registered in 2014, including 247 parafiscal dues.
He also underlined that there were many illogicalities in determining those dues. For instance, the tax on the evidence of the incorporation of the company is charged as a parafiscal due while in fact, it should be a tax levy.
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Honorary President of the Union of Employers of Serbia, Nebojsa Atanackovic, said businesses have been constantly calling for the abolition of parafiscal levies, which are part of the business environment and new investments.
“Once a parafiscal due is abolished, others are quickly introduced,” said Atanackovic.
According to him, businesses would prefer to use the money they spend on non-tax dues to increase their employees’ wages, so they would be encouraged to work better. He added that some taxes are higher than in other countries in a similar position as Serbia, such as the payroll tax, while the value-added tax (VAT) is lower than in Croatia or Hungary.
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