Source: eKapija | Sunday, 27.04.2014.| 20:13
Highlight an article Print out the news

Legal business is the biggest potential for budget – Citizens know what grey economy is and what is the state doing?

(Photo: Suzana Obradović)

When somebody offers us to buy a dress, a perfume, a washing machine, a shampoo, cigarettes or some other goods “underhand”, are we going to refuse it? Are we going to report an employer for “not registering us” to the inspection?

Maybe we approve of grey economy because we think that the state does not dispose of tax profit in the proper way. Namely, this is what 77% of citizens think according to the poll as of March this year conducted by Ipsos Strategic Marketing.

What do economists say?

An economist, Ivan Nikolic, estimates that the fight against grey economy is the biggest potential for budget but he mentions that its suppression will go slowly.

In order to decrease grey economy, the state should first, according to Nikolic, be more decisive when it comes to inspection issue.

Ivan Nikolic
Ivan Nikolic (Photo: b)

An economist, Ivan Nikolic, says grey economy is mostly present in wholesale and retail lawyers’ offices because they are left out from registration, construction sector and vocational services as well as textile industry.

Nikolic expects that moonlighting will decrease in case labor law changes or in case a new one is adopted.

What do citizens say?

According to the research conducted in March this year, 38% of citizens approves of the grey economy in a way while 57% does not.

Majority of citizens thinks grey economy is moonlighting, illegal business and non-payment of tax to the state, the research of the National Alliance for Local economic development (NALED) and the American agency for the international development (USAID) which was presented on Friday, April 25 2014, in Belgrade showed.

- 17% of citizens do not know what grey economy is which a big percentage is. Although majority of citizens think that grey economy is not justified, a huge problem is that many of them support grey economy. Apart from that, citizens do not see the relation between the lack of state budget funds which could be invested in more quality health system, public transport, roads - Jelena Bojovic, Manager for the NALED regulatory reform of the program.

Bojovic mentioned that citizens do not believe the state-owned authorities so majority, i.e. 77%, thinks that the state does not dispose of the tax profit in the proper way.

The research implemented by Ipsos Strategic Marketing, on a sample of 1.000 people, almost three fifths (59%) of population think that the state is decisive when it comes to fight against gre economy while every third citizen think (34%) that this is not the case.

Majority of citizens (86%) says they support fight against grey economy and they state implementation of law and order, employees’ rights and contributions payment as the main reasons as well as the fact of faster progress. They who claim not to support the fight against grey economy say the people somehow manage on their own; otherwise they would lose their job.

Some 12 % of citizens said that they receive monthly salaries in cash, without taxes and contributions.

She pointed out that it is not surprising that the largest number of citizens does not want to report employers because majority thinks that the state does not punish companies and individuals operating illegally in an adequate way.

Citizens state lower prices as the most common reason for buying out of legal flows.

Ivan Nikolic
Ivan Nikolic (Photo: b)

For the goods purchased this way, majority of citizens (83%) said they do not receive a fiscal bill. When they buy food and drinks in cafes and restaurants, 71% of citizens say they get a fiscal bill. Most of them who do not receive a fiscal bill do not ask for it later (29% population), and they state as the reason the fact they do not need it (60%) or they feel uncomfortable (21%).

What does business say?

Businessmen who operate legally say that a lot is being said about the suppression of grey economy but that there are no results.

- On the one hand, we have disloyal competition and on the other we have monopolists. In 2013, our company had 171 inspection audits. The state is putting pressure on small businesses and taxes and penalties are high. The state could help by decreasing taxes for those operating legally and by limiting monopoly because larger number of smaller companies is closing. Also, the state should define norms because legal security is very important for us - Dijana Velisavljev, Manager for relation with governmental institutions at Gomex said on research presentation.

What does the state say?

Tax administration representatives did not attend the meeting.

The state relied on better tax payment collection which it planned to generate through the fight against grey economy so it poured in the budget 2014 non-existing EUR 150 mil.

We will see whether new Government will carry out strict measures through decrease of salaries of numerous employees who politicians employed in public companies or they will finally opt to fight grey economy.

Suzana Obradovic

Only logged-in users can comment.
Follow the news, tenders, grants, legal regulations and reports on our portal.
Testiraj besplatno!
Register for our daily business bulletin, which is sent to your email address at the end of each work day.
Full information is available only to commercial users-subscribers and it is necessary to log in.
Test for free!
Testiraj besplatno!
Full information is available to commercial users-subscribers only.
Testiraj besplatno!

Log in to view complete information:
Forgot your password? Click here HERE
For free test use, click HERE