There is an evident tendency of local administrations to increase the financial burden on companies by introducing more levies and taxes particularly if the company uses a publicly owned premise for doing business.
Companies’ operating costs could increase next year due to the coronavirus-induced crisis, but that depends on the individual local self-governments. More information about new or higher levies and taxes will be available once local governments devise their budgets.
Dragoljub Rajić from Mreža za Poslovnu Podršku (The Business Support Network) says that in 2020, many local governments have responded to the needs of businesses and reduced rents or allowed payment in instalments. According to him, there have been concessions on some levies and taxes too.
“At the end of March, local governments were ordered to reduce all their spending by 20%. They raised property taxes and various parafiscal levies such as irrigation fees, but also utility and parking prices. This increase was not large and ranged between 10 and 20%. Some municipal taxes were also increased. In this way, they have tried to increase their budget revenues, because the budget transfers from the state this year have been considerably lower,” Rajić adds.
According to him, local governments have begun introducing new environmental fees too. This is an opportunity for municipalities in southern, southwestern and southeastern Serbia to generate additional funding. There are announcements that corporate rent fees will be increased in some municipalities next year too.
Companies, for instance, pay around 500 different taxes and fees while farmers pay additional 80 levies. This is why, according to Rajić, it is necessary to form a register of different taxes and levies so that businesses know what and how much the municipality charges.
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Nebojša Atanacković, honorary president of the Union of Employers, also expects an increase in levies for next year due to the economic situation and the expected market disturbances that could follow.
According to him, there are many illogicalities such as that every single company is obliged to pay environmental pollution tax (which was introduced in July) even though the business sector was very much against this tax. They argued that big polluters should pay this, not them, adding that it makes no sense for private schools or nurseries to pay this tax as they don’t pollute the environment. The same goes for the flood protection tax.
NALED estimates that there are several thousand taxes at the national and local level currently in Serbia and that in 2014, there were 384 non-tax levies, of which 247 are parafiscal.
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