Tax evasion costs Serbia hundreds of millions

Why do people evade taxes in Serbia? Because they believe that by paying them they are just lining the pockets of corrupt officials and get nothing back for their money. That goes to show you what a wondeful system Serbs have created for themselves.

That's a pretty biased opinion. People cheat on their taxes in every country that has them. Why single Serbs out? Perhaps educating the population would be a good start. People want roads paved, streets cleaned, parks maintained and they want the government to do it. Yet, they have no real understanding of what it takes to pay for that. Perhaps a good start for educating the population would be to publicly state what it currently costs to do some of those things, what it would cost to improve and what those improvements would cost the average family. I agree there is much waste and corruption, but simply not paying any taxes is not the solution. It only makes matters worse for the average citizen.

I'm not surprised. With companies paying 70%+ in various taxes on top of an employees salary, lots of people are working in the black market. Time for a rethink of the tax system in Serbia.

Until the Serbs see the government being responsible with their tax money ,tax evasion will continue. Like all most half of the privatization funds uncounted for. State budget billions missing no clue were it went those were reported on B92. Is it lining pockets of the criminals in government. Just because they are on top that dose not give them any any rites that citizens dont have. Its not a quick get rich scheme for the politicians and their hangers on some think they hit the lottery jackpot.

Why do people evade taxes in Serbia? Because they believe that by paying them they are just lining the pockets of corrupt officials and get nothing back for their money. That goes to show you what a wondeful system Serbs have created for themselves.
(Ged, 22 February 2010 14:26)

Ged, your insight is likely correct, however I have to wonder what you might think of the following article:

http://wtop.com/?nid=428&sid=1838232

>>snippet:
"Federal workers owe more than $3 billion in income taxes they failed to pay in 2008. According to Internal Revenue Service documents, 276,300 federal employees and retirees owe $3,042,200,000."
but please do read the whole thing. You'll also notice a 2001 survey on general public voluntary compliance. $345 Billion short that year. Patriotic people who don't trust the government? Your guess is as good as mine.

So, would you say that the US federal workers themselves 'believe that by paying them they are just lining the pockets of corrupt officials and get nothing back for their money'? That is almost like shooting oneself in the foot, wouldn't you think? Considering that all federal employees are paid strictly through tax collection efforts, by not paying their taxes, the pool from which they pull their civil servant salaries diminishes.

Now, I suppose this goes to show what a wonderful system Yanks have created for themselves as well?

Though I am tickled pink that you were able to see the likely propagandized reason for not paying taxes in Serbia (sure corrupt government -- nothing new anywhere in the world really), but you may have failed to noticed that people in general do not like to pay taxes. I personally do not find it directly beneficial to me that I pay a few cents more on the dollar in taxes when I purchase a product, nor do I see the direct connection when the government takes a significant portion of my paycheck on a weekly basis. I fully understand the philosophy of tax collection (it is the only way a government generates revenue, and that government in theory is suppose to pay for my public works, such as roads and sewer systems and such), but at the moment the money is taken from me I do not always notice the correlation between a lighter wallet and better life style.

So Ged, is there a way you could extended this thought of yours to include all, not just Serbs, for it is a global issues really. It always has been and always will be. The ruled class is always forced to feed the ruling class. Thank you for your singularly biases opinion.

Hey guys
I agree with you! I am not saying it's just the Serbs or a Serb only problem but only reporting what I have heard so many Serb friends tell me many times. They would happily pay more or new taxes if only they had the clean leaders/ system in which to believe in. Relax - you Serb guys are so touchy!

The amount of taxes lost must be much higher, as the tycoons seem to be exempt of taxes. I red that Belgrades mayor claims to have only 700 euro savings, where he owns most media companies. Nor is he paying taxes over all the platanes that he is cutting that sell very wel....taking the shade from the small sinners.

So Ged, is there a way you could extended this thought of yours to include all, not just Serbs, for it is a global issues really. It always has been and always will be. The ruled class is always forced to feed the ruling class. Thank you for your singularly biases opinion.
(Mr Rae, 22 February 2010 15:29)

I don't know about world-wide (the Scandinavians always make the rest of us look bad by comparison), but the phenomenon is certainly wide-spread. (The amount of evaded taxes in Greece would be enough to close the budget gap, I read recently.)

In the U.S., voluntary compliance used to be enviably high. If it's lower now, I think we should consider the effect of the idea of Reagan's "voodoo economics" - that a lower tax rate results in higher tax revenues, resulting in the idea that citizens can have more services by paying less in taxes. (Revenues did go up under Reagan, but only due to inflation. Clinton raised taxes, and the economy soared.) Obama and his committee to restore financial sanity to the country are going to have an uphill battle here.

On 22 February 2010 17:58, Amer wrote: "I don't know about world-wide (the Scandinavians always make the rest of us look bad by comparison), but the phenomenon is certainly wide-spread. (The amount of evaded taxes in Greece would be enough to close the budget gap, I read recently.)"

People try to evade taxes here too :) I don't know how the system works in Serbia, but unlike in Greece and USA, ordinary workers in Scandinavia is taxed "at the source". That is, it is the employer, the company, that is responsible for deducting income tax (and hand it over to the government) before giving the puny remains to the employee.

Taxing at the source makes it harder for ordinary people to cheat on their taxes, so maybe this is something your government should consider?
--

The big problem in the ENTIRE WORLD is the CORPORATIONS. They generate the most revenue and pay the least tax. What's more, the CEO's also represent the highest salaries and find engenious ways of not paying the share of taxes. Canada has a corporate tax rate of like 10-12% when personal income tax rate can reach 55%. The corporations of the world have 90% of the wealth and contribute the least to the countries/societies in which they operate, and most often to the detriment of it. Corporatism will be the road to serfdom for the entire world, the nation-state is a thing of the past.

Jan,
the taxation model that you speak of is generally used throughout the US as well. It is not the ordinary worker that is the problem. The ordinary worker makes 25K-35K (do not remember the average) and thus pay somewhere on the order of 5K-8K in taxes (again not sure of the official number). It is the super-ordinary worker, the ones that make 250K-M+ salary who would much sooner pay an accountant a great deal of money to find places to shelter, hind and loop-hole their required taxes. It is also an issue with business owner who often times tend to defer these payments to a later date and employ the same strategy to not pay taxes to the government.
The fundamental problem with many tax systems is the terrible complexity within. because of these complexities, it is very hard for regular people to navigate the most favorable path (the one that will require that they pay the least) without professional assistance. The ideal solution would be something similar to the way P Obama was leaning during his candidature speeches, a way that people pay proportional taxes. However, he did not venture into the easiest and most efficient way of doing so. A Flat tax model, let it be 10% across the board, always taken at the source, no questions. There would not be a need for the income tax season, where accountants flourish. In fact there would hardly be a need for federal tax accountants, which would save the state a considerable amount of money. But that is another point all together.

Until the Serbs see the government being responsible with their tax money ,tax evasion will continue. Like all most half of the privatization funds uncounted for. State budget billions missing no clue were it went those were reported on B92. Is it lining pockets of the criminals in government. Just because they are on top that dose not give them any any rites that citizens dont have. Its not a quick get rich scheme for the politicians and their hangers on some think they hit the lottery jackpot.

Why do people evade taxes in Serbia? Because they believe that by paying them they are just lining the pockets of corrupt officials and get nothing back for their money. That goes to show you what a wondeful system Serbs have created for themselves.

So Ged, is there a way you could extended this thought of yours to include all, not just Serbs, for it is a global issues really. It always has been and always will be. The ruled class is always forced to feed the ruling class. Thank you for your singularly biases opinion.
(Mr Rae, 22 February 2010 15:29)

I don't know about world-wide (the Scandinavians always make the rest of us look bad by comparison), but the phenomenon is certainly wide-spread. (The amount of evaded taxes in Greece would be enough to close the budget gap, I read recently.)

In the U.S., voluntary compliance used to be enviably high. If it's lower now, I think we should consider the effect of the idea of Reagan's "voodoo economics" - that a lower tax rate results in higher tax revenues, resulting in the idea that citizens can have more services by paying less in taxes. (Revenues did go up under Reagan, but only due to inflation. Clinton raised taxes, and the economy soared.) Obama and his committee to restore financial sanity to the country are going to have an uphill battle here.

Why do people evade taxes in Serbia? Because they believe that by paying them they are just lining the pockets of corrupt officials and get nothing back for their money. That goes to show you what a wondeful system Serbs have created for themselves.
(Ged, 22 February 2010 14:26)

Ged, your insight is likely correct, however I have to wonder what you might think of the following article:

http://wtop.com/?nid=428&sid=1838232

>>snippet:
"Federal workers owe more than $3 billion in income taxes they failed to pay in 2008. According to Internal Revenue Service documents, 276,300 federal employees and retirees owe $3,042,200,000."
but please do read the whole thing. You'll also notice a 2001 survey on general public voluntary compliance. $345 Billion short that year. Patriotic people who don't trust the government? Your guess is as good as mine.

So, would you say that the US federal workers themselves 'believe that by paying them they are just lining the pockets of corrupt officials and get nothing back for their money'? That is almost like shooting oneself in the foot, wouldn't you think? Considering that all federal employees are paid strictly through tax collection efforts, by not paying their taxes, the pool from which they pull their civil servant salaries diminishes.

Now, I suppose this goes to show what a wonderful system Yanks have created for themselves as well?

Though I am tickled pink that you were able to see the likely propagandized reason for not paying taxes in Serbia (sure corrupt government -- nothing new anywhere in the world really), but you may have failed to noticed that people in general do not like to pay taxes. I personally do not find it directly beneficial to me that I pay a few cents more on the dollar in taxes when I purchase a product, nor do I see the direct connection when the government takes a significant portion of my paycheck on a weekly basis. I fully understand the philosophy of tax collection (it is the only way a government generates revenue, and that government in theory is suppose to pay for my public works, such as roads and sewer systems and such), but at the moment the money is taken from me I do not always notice the correlation between a lighter wallet and better life style.

So Ged, is there a way you could extended this thought of yours to include all, not just Serbs, for it is a global issues really. It always has been and always will be. The ruled class is always forced to feed the ruling class. Thank you for your singularly biases opinion.

I'm not surprised. With companies paying 70%+ in various taxes on top of an employees salary, lots of people are working in the black market. Time for a rethink of the tax system in Serbia.

That's a pretty biased opinion. People cheat on their taxes in every country that has them. Why single Serbs out? Perhaps educating the population would be a good start. People want roads paved, streets cleaned, parks maintained and they want the government to do it. Yet, they have no real understanding of what it takes to pay for that. Perhaps a good start for educating the population would be to publicly state what it currently costs to do some of those things, what it would cost to improve and what those improvements would cost the average family. I agree there is much waste and corruption, but simply not paying any taxes is not the solution. It only makes matters worse for the average citizen.

Hey guys
I agree with you! I am not saying it's just the Serbs or a Serb only problem but only reporting what I have heard so many Serb friends tell me many times. They would happily pay more or new taxes if only they had the clean leaders/ system in which to believe in. Relax - you Serb guys are so touchy!

The amount of taxes lost must be much higher, as the tycoons seem to be exempt of taxes. I red that Belgrades mayor claims to have only 700 euro savings, where he owns most media companies. Nor is he paying taxes over all the platanes that he is cutting that sell very wel....taking the shade from the small sinners.

On 22 February 2010 17:58, Amer wrote: "I don't know about world-wide (the Scandinavians always make the rest of us look bad by comparison), but the phenomenon is certainly wide-spread. (The amount of evaded taxes in Greece would be enough to close the budget gap, I read recently.)"

People try to evade taxes here too :) I don't know how the system works in Serbia, but unlike in Greece and USA, ordinary workers in Scandinavia is taxed "at the source". That is, it is the employer, the company, that is responsible for deducting income tax (and hand it over to the government) before giving the puny remains to the employee.

Taxing at the source makes it harder for ordinary people to cheat on their taxes, so maybe this is something your government should consider?
--

The big problem in the ENTIRE WORLD is the CORPORATIONS. They generate the most revenue and pay the least tax. What's more, the CEO's also represent the highest salaries and find engenious ways of not paying the share of taxes. Canada has a corporate tax rate of like 10-12% when personal income tax rate can reach 55%. The corporations of the world have 90% of the wealth and contribute the least to the countries/societies in which they operate, and most often to the detriment of it. Corporatism will be the road to serfdom for the entire world, the nation-state is a thing of the past.

Jan,
the taxation model that you speak of is generally used throughout the US as well. It is not the ordinary worker that is the problem. The ordinary worker makes 25K-35K (do not remember the average) and thus pay somewhere on the order of 5K-8K in taxes (again not sure of the official number). It is the super-ordinary worker, the ones that make 250K-M+ salary who would much sooner pay an accountant a great deal of money to find places to shelter, hind and loop-hole their required taxes. It is also an issue with business owner who often times tend to defer these payments to a later date and employ the same strategy to not pay taxes to the government.
The fundamental problem with many tax systems is the terrible complexity within. because of these complexities, it is very hard for regular people to navigate the most favorable path (the one that will require that they pay the least) without professional assistance. The ideal solution would be something similar to the way P Obama was leaning during his candidature speeches, a way that people pay proportional taxes. However, he did not venture into the easiest and most efficient way of doing so. A Flat tax model, let it be 10% across the board, always taken at the source, no questions. There would not be a need for the income tax season, where accountants flourish. In fact there would hardly be a need for federal tax accountants, which would save the state a considerable amount of money. But that is another point all together.