Vesic: Employers will have to prove that money paid to their employees for public transport is used for that purpose

Deputy Mayor of Belgrade, Goran Vesic, said today that, in the future, employers who pay their employees cash in hand to cover for their commuting costs will have to prove that every dinar paid in this manner is spent on what it was intended for.

“Under the Labour Law, employers are obligated to pay this amount if the company doesn`t organize the transport to and from work itself. No taxes or contributions are paid on this amount, so it can only be used for the intended purpose. Some employers abuse this by including the transport costs in employee salary and thereby cheating the state out of money, while also preventing their employees from exercising their right to have their commuting costs paid. That is why, in the future, employers will be obligated to prove that the money was really used for the intended purpose”, Vesic said.

He added that, at the request of the city of Belgrade, the Ministry of Finance adopted a decree in early February under which, if the employer doesn`t have proper documents based on which they can prove that the commuting expenses have been compensated for properly (slips, tickets, fuel bills), the money spent will not be admitted as an expense, as per Article 7a, Paragraph 1 of the Law on Income Tax for Legal Entities. The decree was published in Privredni Savetnik no. 5 from February 2019.

Vesic went on to say that a number of employees in Belgrade in 2018 stood at 717,998, while only 114,429 of those had bought monthly public transport fares, although relevant surveys say that public transport is used by around 47.9% of the workforce in Belgrade. This means that around 250,000 employees use public transport without paying the ticket, due to which the City of Belgrade loses at least 750 million dinars a month, or nearly 9 billion dinars a year.

“If the number of prepaid tickets sold increased by only 100,000, the difference in the amount collected could be used to buy around 180 new buses, which would mean that the entire bus and tram fleet of the GSP Beograd (public transport company) could be renewed in 4-5 years”, Vesic pointed out.

(Novi Magazin, 27.02.2019)

http://www.novimagazin.rs/vesti/vesic-poslodavci-da-dokazu-da-je-novac-za-prevoz-isplaen-na-ruke-iskorisen-za-tu-namenu

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