Para-fiscal fees are bothering investors - They propose the abolition of all fees which do not benefit the economy

In Serbia, in parallel with the existing forms of taxation, a large number of para-fiscal fees exist, which increase the effective burden on the economy, under conditions which are often non-transparent and unjustified - this is one of the conclusions of the Foreign Investors Council (FIC), published in the White Book for 2023. They add that para-fiscal fees impose an obligation for which no specific service, right or good is obtained (either none at all, or in an inadequate proportion).

The reform of para-fiscal fees commenced at the end of 2012 with the abolition of 138 para-fiscal fees, continued in 2013 with the adoption of the draft Law on Fees for the Use of Public Goods and the adoption of its final version at the end of 2018.

However, as foreign investors state, in 2018 new para-fiscal fees were imposed, such as the introduction of mandatory membership fees for the Serbian Chamber of Commerce.

In the previous year, they say, no significant progress was made in this area.

Therefore, the Foreign Investors Council recommends the local authorities to continue the reforms of the non-tax revenue system by abolishing all para-fiscal fees that financially burden economic entities, for which they do not receive appropriate benefits in return, in form of certain rights, services or goods, and simultaneously ensure the consistent application of the Law on Budget system that governs the basic principles of introduction and collection of non-tax public revenues.

It is necessary, as they point out, to adopt a Law on Fees which should regulate all fees charged for public service and determine their amount in accordance with the Methodology and the new Law on Local Self-Government Financing, which will be preceded by a comprehensive analysis and alignment with solutions and trends from sectoral laws.

- Any new tax burden or increase in existing ones should be previously announced to taxpayers, and introduced through tax laws drafted by the Ministry of Finance, and not by funds, agencies or other ministries - it is stated in the recommendations of the FIC.

One of the recommendations of foreign investors is to change the upper limit to the amount of the firm tax on the obligation paid by one tax payer, regardless of the number of facilities which the payer has within the territory of one municipality, and regardless of whether there are more facilities in the areas of other municipalities in Serbia (banks, insurance companies, telecommunications companies, etc.).

Additionally, they note that it is necessary to change the methodology and the way of determining the compensation for the environment protection and improvement, so that the compensation is paid only by the taxpayers whose activities affect environmental pollution, and the collected funds are used to mitigate the negative consequences of pollution.

FIC-Savet stranih investitora

Ministarstvo finansija Republike Srbije

FIC

White book

Law on fees for the use of public goods

Para-fiscal fees

Law on the budget system

Law on taxes

non-tax duties