Macedonia mulls amnesty for cash sent abroad

Authorities consider turning a blind eye to untaxed cash in order to ensure the return home of some of the money that has left the country over the past two decades. Macedonia's finance ministry says it will consult experts over whether money that ended up in foreign bank accounts during the the 1990s and afterwards can be lured home to speed up economic development.

'The idea a so-called ‘tax amnesty’ has positive and negatives sides to it," the office of the Deputy Finance Minister, Nedim Ramizi, told Balkan Insight. "We plan to consult experts before reaching any decision on this concept and its possible effects." The head of Macedonia’s Public Revenue Office, Goran Trajkovski, proposed the idea of a "tax amnesty" last week. Trajkovski estimated that between 6 and 15 billion euro had left the country as a result of the privatization of former state-owned firms. Many who profited from these sales sent their money abroad, fearing criminal charges or tax bills.

Trajkovski argued that the economy could profit significantly if only a portion of this money that "is now helping some foreign economy and not ours" was tempted home. Before the centre-right VMRO DPMNE-led government took office, the now opposition Social Democrats mulled similar steps before the 2006 general elections. However, after the party lost the elections the idea was dropped. The Finance Ministry said it would look at the examples of other countries that have proclaimed similar amnesties, such as Italy or Belgium, to see how much money they managed to bring home.

Macedonia’s annual budget in the past few years has averaged about 2.2 billion euros. Amid the global economic downturn, the country has struggled to collect enough revenue to fill a yawning current account gap. The level of Foreign Direct Investment has fallen sharply recently. The vale of FDI in 2009 was only half the value of the figure in 2008, when FDI totalled 500 million euro. Official figures for this year show no significant improvement on 2009.

News source: BalkanInsight link: article