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Dragana Marković, Director Of The Tax Administration Of Serbia

Digitalisation And Transformation To Combat The Grey Economy

The Tax Administration confirms, with all of its activities, that is plays one of the pivotal roles in the fight against the grey economy in the Republic of Serbia. It is continuing to work on its own transformation, while it will soon launch the implementation of a new business model that will be supported by a unique, integrated information system

Combating the grey economy represents one of the priorities of the work of the Tax Administration of Serbia. Activities have been conducted continuously via the increased work of inspection services since 2014, but also with the aim of strengthening and raising awareness of the harmful consequences of the grey economy among citizens and businesses, through educational media campaigns, such as the campaign “Porez plati da ti se dobrim vrati” [Pay taxes to get good returns], and through the “Tax Class” fiscal education for young people, as well as through a series of meetings with expert associations. Prize draws have also been organised multiple times. Furthermore, the activities of the Tax Police Sector are directed towards the early detection of so-called “laundering” and “phantom” enterprises that help companies avoid paying public revenues. When it comes to the illicit trade in excise goods, a total of 175 criminal charges were filed and 89 of these enterprises were identified in the first part of 2023 alone.

According to research conducted by NALED, the participation of the grey economy fell by three percentage points in the period from 2017 to 2021, down to 11.7%. How satisfying is this result?

“We have many reasons to be satisfied,” says Tax Administration of Serbia Director Dragana Marković. “A significant part of these results can certainly be attributed to the successful reform, which has been conducted intensively since 2015, when the first Transformation Programme was adopted, containing a set of measures for effectively combating the grey economy.

Much has been done and the results are becoming increasingly visible. The system for filing tax returns electronically has simplified the process of fulfilling tax obligations for taxpayers. Risk analysis has been improved and enables the applying of a large number of criteria for risk assessments of each taxpayer. We completed the specialisation of tax inspectors in accordance with their specialist expertise and competencies. Furthermore, one of the main steps taken on the road to reform was the introduction and implementation of the new electronic fiscalissation model.

We have demonstrated our worth in responding to the many challenges of these tumultuous times, confirming with our professionalism that all our capacities are at the disposal of the state

Thanks to all of the aforementioned, we’ve had a constant trend of increasing collections since 2015, which is best evidenced through the fact that the coefficient of realised tax collections for the second quarter of 2023 is 217.5% compared to the same period of 2014. Furthermore, more than eight billion dinars of newly discovered revenue was calculated during the same period of 2023, which is up 11 per cent on the corresponding period of 2022.

What effects does eFiscalisation have when it comes to supressing the grey economy and how much has it helped to improve the efficiency of the Tax Administration?

Through the new fiscalisation model, the Tax Administration has received a contemporary and powerful tool in the fight against the grey economy, which provides possibilities to identify taxpayers who don’t want to comply with regulations in the area of recording turnover through fiscal devices.

With the development of the Advanced Analytical Platform in the Fiscalisation Management System, it has been ensured that controls are “targeted”, that the work of the Tax Administration is even more efficient and that results are more advanced.

The new programme for combating the grey economy implies solutions that will fortify the capacities of inspections, courts and the Tax Administration, as well as supporting responsible businesses. What kind of results have so far been yielded by cooperation between the Tax Administration and other parts of the administration and judicial system?

The successful fight against the grey economy, in accordance with the Action Plan of the Government of the Republic of Serbia’s Programme for Combating the Grey Economy 2022-2025, is the result of simultaneous action and mutual cooperation among the institutions of the system.

The results of this work are evident in all segments of the work of the Tax Administration, from collections and control, to the tax police, which in the first half of 2023 – in cooperation with other state bodies – seized 12.5 tons of leaf tobacco, 4.9 tons of cut tobacco, 99,289 packs of cigarettes, 63,146 handmade cigarettes, 5 kg of flavoured shisha tobacco, 31,359 litres of oil and petroleum derivatives, 2,122.80 litres of alcoholic beverages and 154.90 kg of coffee.

Many experts still emphasise an unfavourable age structure and unfilled job posts as a major problem for the Tax Administration. To what extent have you succeeded in strengthening your personnel structure over the previous period?

This is a complex question and providing a comprehensive answer would require slightly more space. The Tax Administration exerts efforts and utilises all available resources to attract more candidates and strengthen its personnel capacity.

As of this year, for the first time, taxpayers were offered tax returns for their annual personal income tax that were completed in advance, which is an example of the best international practice in that field

To this end, we are continuously announcing public hiring calls for new staff and undertaking activities, such as media promotions of hiring calls, the publishing of information about advertised public hiring calls on social media and participation in the “My First Salary” programme of the National Employment Service for the expert training of staff for independent work in the profession.

Tax evasion often increases in times of economic slowdown like we are experiencing today. To what extent are you feeling the effects of the current relatively unfavourable economic situation?

Periods of crisis in society wonderfully illustrate the complexity of the Tax Administration’s position. It is necessary to ensure the collection of sufficient sums from taxes, but also to recognise and assist taxpayers who want to comply with tax regulations, but are unable to do so due to altered business conditions, to ensure that they don’t seek refuge in the sphere of the grey economy. We have nonetheless demonstrated our worth even in such times, first and foremost in the field of public revenue collection, confirming with our professionalism that all our capacities are at the disposal of the state.

The Tax Administration has come to represent one of the symbols of accelerated digitalisation and the introduction of modern electronic solutions. What awaits us on this front in the future?

At this juncture, the Tax Administration finds itself in the process of realising the strategic goals of transformation. Procedures are underway in the process of procuring a unique, integrated information system that will support the implementation of the new business model. Likewise, we are continuing to introduce modern digital operations and implement the goal of ensuring all business with the Tax Administration is conducted electronically. As such, as of this year, for the first time, taxpayers were offered tax returns for their annual personal income tax that were completed in advance. The Tax Administration will also continue with digitalisation in the future, which is a prerequisite for automating tax processes and will contribute to achieving the end goal of creating a modern and efficient institution that provides, at all times, a digital service that’s tailored to the taxpayer.

FISCALIZATION

one of the main steps taken on the road to reform was the introduction and implementation of the new electronic fiscalissation model

DIGITALISATION

The Tax Administration will also continue with digitalisation in the future, which is a prerequisite for automating tax processes

SUPPORT

We recognise and provide assistance to taxpayers in more easily complying with tax regulations under altered business conditions