We see eFiscalization as a powerful weapon against the grey economy, which causes incomparably more damage to responsible entrepreneurs than other negative influences. And we will very quickly see the benefits of this change, both as individuals and as a society
According to the assessment of the latest NALED study, the economic grey zone has an annual turnover exceeding seven billion euros. The new system of fiscalization, which should lead to significant reductions in unfair competition, was introduced with great haste and without the extending of deadlines for those resisting this change. Violeta Jovanović, executive director of NALED – an organisation that has long since advocated in favour of this reform – believes that we’re readily entering a system that was introduced by many countries a full decade ago.
Are we now really ready for this step?
– The new system of fiscalization brings great change to Serbia’s business climate, because it will significantly improve supervision of the recording of retail turnover and help improve tax culture and responsibility among both citizens and businesses when it comes to the issuing or accepting of fiscal receipts. eFiscalization will also encompass a much larger number of entrepreneurs than were included under the pre-existing system, thus giving us a clearer picture of the volume of retail turnover. We are now replacing the extremely outdated technology that we introduced more than a decade and a half ago with a modern solution that’s being introduced by ever more countries.
The Tax Administration is gaining an effective means of control and thus has a higher level of responsibility to use this tool to its full extent. Croatia introduced this system back in 2013 and, thanks to eFiscalization, improved the efficacy of tax inspectors who had the “luxury” of reducing the number of onsite inspections threefold while detecting four times as many irregularities. It’s tough to find justifiable reasons for why we’ve had to wait so long, because the first preparations for eFiscalization in Serbia also began almost 10 years ago.
The statistic showing that slightly more than 120,000 businesses applied for fiscalization by the beginning of April demonstrates that, with every reform, we have a significant number of businesspeople who always wait until the last minute to adjust to new ways of working or don’t sufficiently inform themselves with regard to obligations. That’s why all the training we’ve organised on eInvoicing and eFiscalization – and we’ve conducted more than 30 workshops and training courses for many thousands of users, in cooperation with the Ministry of Finance and with the support of the British Embassy, within the scope of the Small Business Info project – we placed our focus on accountants because they are, according to research that we’ve conducted, the main source of information for approximately 80% of small enterprises. That’s why we believe that the vast majority of businesses are ready for 1st May.
For many skilled craftsmen and traders, such as hairdressers, beauticians, painters and plasterers, ceramists, sporting associations and many other smaller businesses, this was an additional burden that came when they’d already been weakened by Covid-19 and inflation. When will they see the first positive effects of this change?
– We welcome the Ministry of Finance’s decision to secure subsidies for all those who shift to the new system of fiscalization or are just becoming taxpayers. Those 100 plus 100 euros have significantly reduced the costs to businesses. On the other side, we always view the transition to eFiscalization as an investment. Taxpayers will feel the first positive effects of fiscalization already during the first year, as it will eliminate the costs associated with the need to store copies of invoices, maintain a mandatory cash register etc.
However, they will benefit much more from fiscalization’s indirect effects. First and foremost, we see eFiscalization as a powerful weapon against the grey economy, which causes incomparably more damage to responsible entrepreneurs than other negative influences. Unfair competitors, who don’t keep records of their turnover and sell smuggled goods or unregistered products, are much more price competitive and reduce the turnover of responsible enterprises. Just last year, the Tax Administration temporarily closed 41% of controlled facilities due to irregularities in the issuing of invoices, which testifies to the scope of the challenge we’re confronting.
We welcome the Ministry of Finance’s decision to secure subsidies for all those who shift to the new system of fiscalization or are just becoming taxpayers
The National Cashless Payment Initiative has launched the website boljinacin.rs, which is intended to help transitioning entrepreneurs. How much interest has this programme generated?
– The boljinacin.rs website is currently running pre-registrations for participation in the POS programme, through which we want to provide help to small traders and all other entrepreneurs in improving their operations by introducing noncash payments and thereby broadening their customer base and securing a higher turnover. The value of noncash payments in Serbia increased from 4.6 to 5.7 billion euros last year alone, and is increasing at double-digit rates annually, thanks to having proven their practicality, efficiency and reliability, both around the world and in our country. We plan to distribute about 4,000 POS terminals and software solutions for regular and online shops during this year and a total of 25,000 over the course of the three years of the project, thus expanding the acceptance of infrastructure significantly.
Do you expect inflation, which threatens to hit double digits, to influence the eFiscalization process and its ability to increase budget revenues?
– The inflation being seen around the world today is a direct consequence of the conflict in Ukraine and its negative effects won’t bypass any country, Serbia included, so reduced consumption caused by rising prices will inevitably also influence budget revenues, which will make a realistic overview of the initial effects of the introduction of eFiscalization difficult.
Starting from 1st May, more than 10,000 users of public funding will switch to the new model of electronic invoicing, and they will be joined by all 125,000 VAT payers by January 2023. What has this practise brought in the many countries that have already introduced it?
– At this moment, around 80 countries around the world are in some phase of introducing eInvoices, which are already strongly present in Europe. According to European Commission data, the costs of producing invoices have been reduced by 95% in Lithuania and Finland, while the time required to process one invoice in Poland has been reduced by as much as 90%, thanks to them having shortened the process from 30 minutes to just three. Croatia has calculated that its economy’s operating costs have been reduced by €350 million annually thanks to eInvoices. Increased efficiency and reduced costs are the basic advantages, while – as with eFiscalization – the state has received another important instrument for monitoring the transparency of financial flows, this time in the wholesale domain.
The latest NALED Grey Book included your recommendation that the Ministry of Finance expand the scope of fiscalization to include lawyers, taxi drivers, veterinarians and other sectors that often remain beyond the reach of fiscalization. Do you expect the Ministry to implement this recommendation?
– These activities will inevitably come under the scope of fiscalization at some point, and thus we shouldn’t wait too long. Our aim is to build a society with responsibility and solidarity that will thrive economically for the benefit of all citizens and businesspeople, which is why we must all contribute equally.
The introduction of eInvoices and eFiscalization is something that should be welcomed by every society that wants to thrive both socially and economically
Our aim is to build a society with responsibility and solidarity that will thrive economically for the benefit of all citizens and businesspeople, which is why we must all contribute equally
Reduced consumption caused by rising prices will inevitably also influence budget revenues, which will make a realistic overview of the initial effects of the introduction of eFiscalization difficult