30,000 Citizens on the Black Market?

By , 18 Mar 2018, 12:06 PM Business
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The estimation by the Ministry of Finance shows that 20 and 25 percent of VAT income go to the grey area while 25 to 30 thousand employees work illegally, said the Minister of Finance Darko Radunovic.

The income from the VAT for the current year is designed to be 617,3 million euro which means not even 120 to 150 million euro is being charged. Radunovic explained that this is the estimation done by the Ministry of Finance in the aspect of improving the Revenue tax direction, i.e. creating conditions for the electronic fiscal centralization of all cash-registers.

Let us remember that as per estimation of the Ministry of Tourism, 30 percent of income goes to the grey area, i.e. 300 million euro. The minister said that it is difficult to estimate the exact amount of the grey economy and that the evaluations were performed per sections. They expected positive effects in reducing the grey economy after the improvement of the electronic fiscal centralization of cash-registers and mentioned Croatia as a good example.

“In Croatia after the electronic fiscal centralization, the incomes were raised over 30 percent in the first year. This only happens in the first year because later the increase cannot be that high. In that first year, most of the grey economy is transformed into legal procedures," explained Radulovic.

Commenting the estimation of 25 to 30 thousand employees on the grey labor market, Radulovic explained that this could be solved through the reduction of taxes on the salaries.

“A case of the grey market is also when the employee is insured on a minimum wage, and he receives the remaining part of the salary in some other way. I am convinced that the solution is in reducing taxes on wages and this must be done thoughtfully without making a financial influence which would endanger us.

As much as we reduce the taxes on labor, the number of taxpayers, i.e. registered employees from the gray market, needs to be increased for that same amount," said Radulovic and explained that this way the consequences for reducing the taxes on salaries will not be imposed on the budget but they would be equally allocated.

Text by CdM, on March 17th, 2018, read more at CdM

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