The Tax Administration works constantly to improve the integrated information system, thus confirming its position as a leader in the use of information technologies within the scope of the state administration of the Republic of Serbia. The COVID-19 Pandemic served, in a way, to confirm the correctness of the selected strategic direction of development.
In accordance with the Government of the Republic of Serbia’s strategic commitment to the digitalisation of public administration, and within the framework of the process to transform the Tax Administration that was launched previously, we succeeded in creating an extremely modern digital infrastructure that provided maximum support to the effective implementation of all government measures, both for taxpayers and employees in the Tax Administration, says Dragana Marković, director of the Tax Administration of the Republic of Serbia.
“The significant assistance that was provided to companies by the State, through direct payments or the deferring of payments of tax obligations, is being successfully administered by the Tax Administration of the Republic of Serbia. The COVID-19 Pandemic, which was declared during the last year of the implementation of the first Tax Administration Transformation Programme, was in its own way a kind of confirmation of the correctness of the strategic direction of development that had been chosen,” notes our interlocutor.
Illustrating this, an average of around 19,200 applications are now submitted electronically through the ePorezi portal on a daily basis. All applications are electronic, while electronic status inquiries and the issuance of electronic certificates have been enabled.
The continued reform of the Tax Administration is underway and should be completed by 2025. Under these conditions, how possible was it to work on regular tasks in this area and what are your priorities until the end of this year and during next year?
If we want to establish efficient and modern operational processes, there is no alternative to the route of constantly working to advance changes. On the contrary, everything that happened last year only convinced us that we are on the right track and that we must continue improving both our work and the services that we provide to our taxpayers.
The collection of public revenues that is the responsibility of the Tax Administration improved between 2014 and 2021 by a realised index of 170.3%. The total collection of all public revenues is recording a growth trend year on year. Even during the year of the pandemic, by applying public revenue collection measures that we assessed as being appropriate to the new situation, we managed to fully implement all planned collection tasks, regardless of restrictions.
The new Tax Administration Transformation Programme 2021- 2025, which was adopted by the Government of the Republic of Serbia in May this year, foresees the creation of a modern and efficient institution that provides sustainable and predictable public finances by implementing strategic goals through three components.
The first component is an integrated information system that crosschecks most data, whether data from the Tax Administration or from third parties, with the aim of identifying taxpayers who don’t comply with tax regulations. The second component is the personal ePortal of the taxpayer, as the basic model for communicating with the Tax Administration, while the third component is the formation of a new profile of tax officer who has an exceptional level of professionalism and competence.
Thanks to electronic fiscal devices, at any time and in real time, the Tax Administration will have an insight into who doesn’t issue fiscal invoices on the ground and take measures that are within its jurisdiction
When it comes to the further digital transformation of the Tax Administration, what do you think would be the next key steps for this work? What new services do you intend to introduce for taxpayers?
The key activities are related not only to digitisation and the simple translating of procedures from paper to digital form, but rather to the essential changing of operational processes and the automation of the operational activities that we conduct. We’ve targeted further development in two directions: internally, which relates to the simplifying, digitalising and automating of the working conduct of our tax officials; and externally, which relates to the development of the services that we provide to our taxpayers and aims to ensure the timely and complete fulfilment of tax obligations without the need to physically visit organisational units of the tax administration.
Alongside the aforementioned, we are focused on the building of operational infrastructure that will provide us with sufficient information about the business of taxpayers with a minimal presence, as we want to be integrated into their operations, present and invisible, and to encompass taxpayers who only partially express their tax base in tax returns.
This will enable us to introduce a register of e-invoices, but also to introduce a new model of fiscalisation prior to that. The Law on Fiscalisation comes into force on 1st January 2022, and the Tax Administration is preparing intensively to ensure that we can readily await the transition to a new way of working.
Although progress has undoubtedly been achieved when it comes to improving the efficiency of the Tax Administration, it seems that companies in Serbia require further, clearer progress with regard to the correct and consistent interpretation of the law and, as a consequence, the equal treatment of all taxpayers. According to the Law on Tax Procedure and Tax Administration, with the aim of securing the uniform implementation of regulations within the scope of the jurisdiction of the Ministry of Finance, acts on the application of these regulations (explanations, opinions, instructions, directions etc.) that are issued by the Minister of Finance, or a person authorised by the minister, are binding for the procedures of the Tax Administration. These acts are published on the websites of the Ministry of Finance and the Tax Administration, so they are available to everyone. The Tax Administration of the Republic of Serbia is an administrative body within the composition of the Ministry of Finance, with which we have extremely good cooperation and open, high-quality daily communication to resolve all possible issues. We also pay special attention to the issue of proper and consistent interpretating of the law, as well as a uniform approach on the ground and equal treatment of all taxpayers.
One of the FIC’s initiatives calls for the establishing of an administrative oversight function within the scope of the Ministry of Finance that would provide an effective mechanism for controlling the legal compliance of the work of organisational units of the Tax Administration. In your opinion, how much would this mechanism contribute to improving the work of the Tax Administration?
Mechanisms for controlling the work of the Tax Administration already exist. Supervising the work and approach of state administration bodies is the responsibility of the Administrative Inspectorate within the scope of the Ministry of Public Administration and Local Self-Government.
According to positive legal regulations, the second instance body in the case of the Tax Administration is the Ministry of Finance’s Department for Second Instance Tax and Customs Procedure, which can – at the request of a party or ex officio – fully or partially annul the final decision of the Tax Administration, or fully or partially overturn a solution of the Tax Administration. Thus, the second-instance body within the ministry already performs certain controls of the work of the Tax Administration. And, finally, control over the application of laws and other regulations on the part of organisational units, as well as internal controls of the work and behaviour of tax officials and personnel, in accordance with positive regulations, is performed by the Tax Administration itself, which is also obliged to implement measures stipulated by law. As such, the question is whether it is necessary to introduce another control function and whether that would contribute to improving the work of the Tax Administration.
The Tax Police apply open-source intelligence search techniques to detect individuals and legal entities who use advertising via internet portals to sell goods illegally and thus combat the market of the grey economy in e-commerce
One of the key topics of the past few years has been improving the competence of the Tax Administration’s personnel. To what extent are your current capacities sufficient for meeting the needs of taxpayers?
Current capacities are insufficient, but the Tax Administration is undertaking all necessary actions to ensure that operational processes run smoothly and efficiently. One of the greatest challenges in the changes we’re implementing is linked to the issue of developing the function of human resources. And that doesn’t refer only to the number of employees and recruitment procedures, but rather we observe this issue in a broader context, because the development of the function of human resources also implies the creating of a profile of a new tax officer who possesses special skills and knowledge. In order to achieve this goal, it is necessary for us to have a developed education system that encompasses general training, but also training for specialist, in-depth knowledge of tax forms.
To what extent has the Tax Administration been able to fully dedicate itself to continued work on the suppression of the grey economy under the conditions of the COVID-19 Pandemic?
As a key institution in the struggle against the grey economy, the Tax Administration has regularly carried out activities aimed at combatting unregistered activities and illicit trade in consumer goods, as well as controls of the work of certain segments even during the pandemic.
Exceptionally good results have also been achieved in the fight against the grey economy thanks to excellent cooperation with numerous state institutions, primarily the Interior Ministry, the Prosecutor’s Office and the Customs Administration. We also expect special help from all state bodies when it comes to the procedure for applying the Law on Determining the Origin of Assets and Special Tax, which they are obliged to do according to this law, but also which the success of implementation, i.e., the results in that field, is largely dependent on.
Modern e-solutions and software are increasingly included in your work. How much can they help in, among other things, detecting the risky behaviour of taxpayers and sophisticated grey economy cases?
Modern electronic solutions and software, which are increasingly present in the work of the Tax Administration, enable a faster method of searching and processing larger amounts of data in the process of detecting the risky behaviour of taxpayers. Given that the development of e-commerce has influenced the expansion of the grey economy market, the Tax Police apply the methodology of open-source intelligence (OSINT) search techniques to detect certain individuals and legal entities who use advertising via internet portals to sell goods illegally with the aim of avoiding invoicing and the payment of applicable public revenues.
We pay special attention to the issue of proper and consistent interpretating of the law, as well as a uniform approach on the ground and equal treatment of all taxpayers
Key activities of the Tax Administration are related to the essential changing of operational processes and the automation of the operational activities that we conduct
One of the greatest challenges is the issue of developing the function of human resources and creating the profile of a new tax officer who possesses special skills and knowledge