"Strict measures" against gray economy announced

"Strict measures" against gray economy announced

Krstić told the RTS that the fight against the gray economy requires strengthening of the Tax Administration institutions in the first line, adding that the data analysis has already identified the ones that pay and the ones that evade taxes.

He announced soon amendments to the Tax Procedure Law and by-laws so that the fight against the gray economy could get into full swing by July 1.

The tax reliefs that have been announced as part of the Serbia's government's package of measures for the economic recovery are also part of the fight against the gray economy, he said.

Aside from tax reliefs, strict inspections of labor and the Tax Administration will be introduced, Krstić said.

“We will offer an opportunity to people who are being paid under the table to be registered properly. The second purpose of tax reliefs is to provide incentives for investors,” the minister said, adding that both domestic and foreign investors who create jobs will get 70 percent of taxes and contributions from the budget for the newly-employed.

Asked about the cost of the tax reliefs, he said that the measure will be fiscally neutral or even positive.

“These are taxes and contributions that would not exist otherwise, jobs which would not be created otherwise. On the contrary, the people would still have unreported employment or no job whatsoever,” Krstić said.

Krstić described the Monday meeting between government members and officials of the largest companies operating in Serbia as an event without precedent on the Serbian political scene.

"Before adopting the measures, we met with those who are supposed to benefit the most from them, those whose business is doing well and those who have problems in business, to see if we can improve the measures so everyone can benefit from them," Krstić stated.

The measures were met well at the meeting, and the prime ministers and ministers heard some proposals from the businessmen, which they will consider.

The businessmen requested a new meeting with the ministers in charge of the economy to discuss if their proposals had been incorporated into new laws and regulations, Krstić noted.

He believes the International Monetary Fund will also react positively to the government measures, because they "fit the framework," that is it is already known that around EUR 140 million from the budget will have to be spent in 2015 and 2016 to implement the measures.