For twenty odd years, Goran Pitić has been focusing on raising competitiveness and fair competition. He was the first chairman of the government Competitiveness Protection Council and today he is again on the front line of this fight in his capacity as chairman of the NALED Fair Competition Alliance.
When we asked him what his motives were for becoming chairman of this Alliance, which works with the government to combat the grey economy, he said:
“This is an issue I have been dealing with for many years now, both academically and professionally. I have been fighting the grey economy and promoting competitiveness and fair competition. And I am doing so again. The issue of competitiveness has to be one of the priorities of any government agenda, especially this new one, because it is crucial for the regional ‘game’ and for Serbia to utilise its potential. This triangle of competitiveness, innovation and entrepreneurship, along with good education, helps the social system and raises and creates new values. I am also personally motivated, and at NALED this is a segment that requires additional energy, knowhow and expertise.”
What are the greatest challenges in implementing the National Programme for Combatting the Grey Economy: political will, resistance from institutions, implementation of regulations, lack of funding or something else?
The Ministry of Finance understands and is determined to set aside enough competent resources to take part in the project. The second thing is participating in coordinating and consolidating certain activities. This requires changes in the way things are done and in the organisation itself. There will be resistance, because this requires a serious improvement of work coordination; not only in the inspections, but in other services too. Regulations will have to change too, to motivate employers to transfer their business from the ‘grey’ to the ‘white’ economy. This will require a serious recalculation in the Ministry of Finance. Then there is the issue of income tax. However, there have to be tough sanctions along with stimulating measures. It is of vital importance to have good coordination of all participants in this process, and that’s why NALED plays an important role.
All services, but above all customs and inspection, must be able to conduct risk analysis based on the data stored in the online fiscal system
Which National Programme measures are going to be the most effective? Which ones is it most important to implement?
There are several goals and measures that need to be attained and implemented. First and foremost, there is more efficient inspection supervision and improving the fiscal system. Activities have already been agreed upon and we expect fiscalisation, or rather its expansion, to have the biggest effect. This entails introducing online cash registers and having more cashless payments. Crucial activities are being carried out – from changing the old and implementing new regulations to the government’s receipt lottery. Only 20 per cent of the entire economy has been fiscalised.
In terms of inspection supervision, certain regulations will be changed and harmonised and we shall have a consolidated inspection supervision web portal. Work is also being done on risk analysis. All services, but above all customs and inspection, must be able to conduct risk analysis based on the data stored in the online fiscal system. It is similar to the workflow of the authorised organisations (for countering illegal trade), which is already in place and is applied to cigarettes and tobacco. The same will be done for coffee, alcohol, meat, baking products and possibly for oil too. The system entails harmonising the work done by inspectors, the police, customs and all other authorities responsible for combatting illegal trade. This is the activity plan that NALED devised in agreement with the Ministry of Finance.
The Alliance for Fair Competition brings together 20 of the biggest taxpayers in the country. Some say that, for this reason, the Alliance should not participate in devising the National Programme. Why is it important for businesses to be part of this process and how would you respond to the critics?
It is perfectly natural for lawmakers to cooperate with law abiders. It is in both of their best interests. The contribution provided by these and other companies is invaluable, because the government and businesses have the same interest – to create the same conditions for everybody who stimulates the economy so that most of them can operate in regulated conditions and thus ascertain their level of competitiveness.
NALED has an active role in implementing these measures. Does this mean that the state is willing to delegate some of the work to other associations and the civil sector, and why is this good news?
Generally speaking, it is important in the period ahead for the government to signal as clearly as possible that any organisation not directly involved in government affairs, like agencies or regulatory bodies, are welcome to participate if they share a common interest. An isolated government cannot accomplish results if it doesn’t involve those entities that can contribute with their initiatives and ideas, and that have the capacity and willingness to get involved in implementing projects like this one.
It is perfectly natural for lawmakers to cooperate with law abiders. The contribution provided by companies is invaluable, because the government and businesses have the same interest
What would signal to you that the Programme has been successful and that NALED’s effort has paid dividends?
There are several signs already. There is a fear over whether the capacity of the state can follow the numerous measures in the Programme, both in terms of legislation and in an organisational sense. I already have a feeling that my decision to join this team makes sense, because the willingness and readiness to face the problems and search for solutions have already been validated.