The legal deadline for disbursement of VAT return in Serbia is 45 days, however, the Serbian Tax Administration rarely adheres to this deadline, and the average waiting period for VAT return could be two months, and in some cases even three months.
In the light of that fact, the statement that the Finance Minister, Siniša Mali made two days ago saying that he “does not see the reason why VAT refund should not be paid the next day after filing the relevant documentation, providing that the documentation is correct,” makes sense only if the state finalizes the comprehensive, deep reform of state institutions which, so far, has not yielded good results. The Tax Administration is currently breaking the deadlines for VAT returns.
“The length of the delay depends on the month of the year and is usually between 15 and 18 days. However, there are those extreme delays when VAT returns are 55 and 60 days delayed”, says Dragoljub Rajić from the Business Support Network.
Minister Mali stated two days ago that the government would have to come up with a proposal for reforming the Tax Administration. The World has Bank allocated EUR 50 million towards this and the money is supposed to be spent on purchasing “hardware, software and possible new buildings” by the end of the year.
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It is precisely this lack of reforms in the Tax Administration that has led to the fact that today we have delays in VAT returns of up to 60 days – Rajic adds.
“In the countries of Western Europe, like the Netherlands, Belgium, Germany and Austria, the deadlines are from 24 hours to 7 days. These are acceptable deadlines because firms count on that money; they need it to buy raw materials and pay suppliers. It is important that the deadlines are shortened because many companies take out loans, and how can they pay them if they don’t even have the money for basic operations”, says Rajic.
The Serbian Tax Administration is inexperienced and incompetent, Rajic claims, but this problem dates back to the past.
“In 2004, when the Tax Administration reform started, everything had to be changed, the entire system, including employees, and software. However, they failed to do this and the foundation that the Tax Administration rests on is not sound”, Rajic adds.
“We need a comprehensive reform”, Rajic says and adds that we need to bring experts from the German tax authorities who would help out with the reform project.
“Only when the project is completed, we can launch public calls for the purchase of new software, but not before. We should not spend money on something that might not work later. In addition, we don’t have appropriate experts in the Serbian Tax Administration who know how to carry out the reform and make the system run properly”, says Rajic.
He believes that another big problem to be solved by the reform is misuse of power and the very pronounced and present corruption. For instance, some companies are constantly besieged by inspectors, while others, which have strong political connections, are almost never frequented by inspectors.
This post is also available in: Italiano