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

Croatian government debates VAT on milk, bread, medicine

The Croatian government is considering introducing taxes on milk, bread and medicines in an effort to collect more money to finance rising debt payments. Croatia paid 5.3 billion kunas (719.5 milion Euros) for interest on debt two years ago. This year those financial obligations have grown to 6.3 billion or 855 million Euros, and are expected to reach 7.3 million (991 million Euros) in 2011.

The cost of these annual expenditures has surpassed all state subventions to companies or farmers.
The government is currently debating where to find the additional funds for these rising costs as they prepare the next year’s budget, the daily Vecernji List writes.

According to the government, the budget for 2011 must not defy the established framework and the three-year guidelines. The revenues from taxes are expected to be 108 billion kunas (14.6 billion Euros) while expenditures must stop at 122 billion (16.6 billion). According to these expectations, the expenses must be half a billion kunas lower than this year.  The maths may not add up when taking other expenses into consideration, such as higher debt payments, more money for pensions, and financing the upcoming census.

News source: Croatiantimes.com link: article

Sofia City Hall with Parallel 'Mansions' Probe

The majority of the buildings filmed by the Bulgarian National Revenue Agency (NRA) lack permits for their use and their owners failed to pay taxes to the Sofia City Hall even though they occupy these homes for years. The statement was made Monday by the Sofia Chief Architect, Petar Dikov, who spoke in an interview for the Bulgarian National Radio, BNR, saying he was pleasantly surprised by the outstanding architectural design he noticed on quite a few pictures.

Last week, a NRA team videotaped from a helicopter properties in several affluent Sofia suburbs. It was discovered some of the properties are not included in any registries and do not have permits for their use, while others are listed as office buildings, but are actually residencies with pools, tennis and mini golf courts, and playgrounds. The NRA Director, Krasimir Stefanov, says the owners are guilty of tax crimes because they have received a tax deduction for constructing office buildings, but use them for different purposes.

News souce: Novinite.com link: article