The issue of transparency in changing tax regulations, the reform of rules governing tax depreciation, the fair value of assets, tax on deductions on services, tax crimes and the treatment of “team building” activities are issues for all participants in the business sector.
A lack of transparency and public debate in the area of changes to tax legislation has been among the significant problems in the field of taxation that have been highlighted for years by the Foreign Investors Council. Certain progress has been achieved in the previous year, with the Ministry of Finance having submitted several draft regulations for public debate and the Council being able to conduct a constructive dialogue with the Ministry of Finance on important issues – VAT, property tax and fees for the use of public goods. On the other hand, there was a lack of discussion on some other important issues, such as amendments to the Law on Tax of Profit. We expect that constructive dialogue to continue in the future, and that the process will be additionally improved through the timely and comprehensive submission of draft regulations for public insight.
There has been no significant progress in relation to other recommendations of the Council in the taxation domain. Positive changes that could be highlighted include the reduction in the volume of services that are subject to tax deductions on the income of non-residents, coming into force as of 1st April this year, and changes to the rules on tax depreciation for intangible assets. The scope of these changes is extremely limited, and most of the problems related to tax regulations and their application that are faced by businesses still remain unresolved.
Most of the problems related to tax regulations and their application remain unresolved. However, despite this, we expect the dialogue with the new Minister of Finance to yield tangible results in the period ahead
Despite this, we expect the dialogue to intensify in the coming period with the new finance minister and his team, and to yield tangible results.
As one of the strategic priorities of the Government of the Republic of Serbia, 2016 saw the launch of the transformation of the Tax Administration into a modern organisation that is more efficient in collecting taxes and implementing tax discipline, and which provides higher quality services to taxpayers. Efforts to date have focused on organisational changes, reducing the number of branches and representative offices, and increasing the efficiency of work. The Foreign Investors Council supports efforts to improve the work of the Tax Administration and all positive changes carried out thus far. However, it is still necessary for a lot to be done. We consider the strengthening of the Tax Administration and the Ministry of Finance – in terms of the numbers, qualification structure, professional training and skills of employees, information systems and other resources – as being of great importance for the successful completion of the transformation, resolving existing problems and improving the tax system and practise.
The Working Group for the Modernisation of Tax Administration was formed a few months ago under the auspices of the Ministry of Finance and the World Bank, which includes a representative of the Foreign Investors Council. We hope that this Working Group will contribute to the fast and successful completion of the transformation process, and we will endeavour to provide a constructive contribution to that.