The long arm of the state reaches the pocket of the self-employed – Economy

Photo: EPA / GREGOR FISCHER

Rarely does anyone disagree, at least publicly, with this statement, but now the minister and taxpayers intend to collect taxes and contributions in the last five years on the income earned by tens of thousands of people (an estimated 80,000 to 100,000 people earn this way), which is already a problem for many.

For example, according to the assessment of the Center for Public Policies, which has been dealing with the problem of freelancers or digital workers for a long time, someone who had an income of about 80,000 dinars a month owes the State about 2,300 euros a year.

If taxpayers really started combing foreign currency accounts in the last five years, where they have a legal right, the average self-employed person would have to pay more than 10,000 euros.

Miran Pogačar of the Internet Workers Initiative, which was made to negotiate in some way with the state, says it would lead many into debt bondage.

“During the pandemic, revenues decreased and the state has now started to start mass collection.” Legal solutions did not include this group of people at all, and Serbia is among the 15 countries in the world in terms of the number of self-employed. for every 1,000 inhabitants, “he says.

The Public Policy Center proposes to collect only taxes and contributions as of July 2020, and not for previous income.

However, the minister left room for talks, but only about future taxes.

“I am willing to talk about what it will be like in the future. If you have to explain some things or change some laws, it is not a problem, but you have to settle the obligations of the previous period,” Mali said.

Elem, there are several problems that need to be solved. First, the self-employed complain about high fees, averaging 30 to 45 percent of gross earnings. In other words, if a payment of 100 euros comes from abroad, a translator, YouTuber, or for example an English teacher through the Internet must go to the tax administration to declare income and pay 30 to 45 euros. And so on for each payment.

Milan Trbojević, accountant, points out that there is an obligation to pay taxes and contributions from previous laws, but that there is a lack of logic in contributions to pension insurance.

“At the end of 2019, the law on PIO was replaced, which allowed the self-employed to recognize their seniority.” Before there was the obligation to pay contributions, but they could not exercise the right to do so, “he says.

These days, the Tax Administration, after the call to declare income and pay taxes, under threat of offenses and criminal charges, has published on the site how it is reported and calculated, and there are six parameters in the process that determine how much the tax will be. . To complete the application, you need a solid knowledge of law or accounting or some other skills to combat bureaucracy.

However, as Tanja Jakobi from the Center for Public Policy explains, the largest number of these workers receive small payments, and that in an irregular way.

“Let’s say students who teach English online charge about $ 4 an hour. When they have time they give more classes and when they prepare for the exams they don’t even take them. And now we should expect them to go through that complicated tax filing procedure for every four dollar payment. They cannot use lump sums because they have no regular income, and lump sums have to pay taxes and contributions every month. There are also many jobs “for women”, translation, virtual secretaries, photo tagging, data entry or elderly people who have lost their jobs, have internet and earn a dinar through one of the platforms, “she explains, noting that many They don’t even know it, they have some obligations to the state, not how much or how to settle them.

It points out that natural persons who obtain income abroad are not covered at all by the Labor Law, so this problem must be solved from a labor perspective, not a tax one.

The community’s proposals are that for those with lower incomes, somewhat above the minimum wage, the non-taxable base should be increased or the standard costs deducted from the base should be increased.

According to the current personal income tax law, those who work with an employment contract are deducted 20 percent, and those who earn with a copyright contract are reduced by 50 percent. , for example, for sculptors, 43 percent, for example, for translators, cinematographers and works of art. and finally 34 percent for the rest, where the majority of the self-employed are found.

When these costs are deducted, then the income tax of 20 percent of that base is paid, then the contribution for the PIO of 25.5 percent, for health insurance 10.3 percent and for insurance of unemployment 0.75 percent.

The situation is different for those who are employed and those who are unemployed.

A special topic is the justification for combing out tens of thousands of foreign currency accounts and going after students who have raised several tens and hundreds of euros. It could turn out that the collection cost of the Tax Administration already decimated by personnel is greater than the benefit for the state budget.

Jakobi points out that in the internet community there is a growing understanding that taxes must be paid and those with large incomes want to pay them, and those with regular incomes are already lump sums or have a limited liability company.

“The state must recognize them, see their needs and sit down and talk with them and not go to bed,” said Danas’ interlocutor from the Center for Public Policy.

Experiences of the region

Serbia is not the only one facing this. In 2015, they started in BiH similarly to our country with threats of fines and, according to those familiar with the matter, practically decimated internet freelancers. In Romania, income taxes of 16 percent and pension contributions of 26.3 percent are paid, although there is the possibility of a lower contribution of 10.5 percent, but also a lower pension. The minimum is 64 euros and the maximum is 915 euros. Income of less than 300 euros per month, no pension contributions are paid (of course there is no pension based on that). The contribution to medical insurance is 5.5 percent of net income. There are also optional contributions for sickness or maternity leave insurance, unemployment insurance and work-related accidents.

In Bulgaria, the income tax is 10 percent, but with deductions it is effectively 7.5 percent. 27.8 percent of the contributions are paid, a maximum of 1,000 euros per month.

According to 2018 data, North Macedonia, which is the first in the world in terms of the number of self-employed persons per 1,000 inhabitants, only collects the income tax of 10 percent, a maximum of 1,500 euros per month, and that is what refers to the obligations with the State.

In Croatia, the deduction is 30 to 50 percent, and a 25 percent tax and 20 percent contribution are charged. Authors do not have to pay contributions.

Progressive pores

The main proposal of the Online Workers Association refers to the introduction of progressive tax and contributory rates and the harmonization of the non-taxable part of income with the minimum wage.

“We believe that income up to the minimum wage in Serbia should not be taxed, and for all income below the minimum consumer basket, the current tax rate should be reduced to the smallest percentage possible, which should not exceed 10 %. Of course, as income increases, so will the tax rate. The same is true for contributions to mandatory health and pension insurance. Up to the minimum wage, health insurance would be paid at a minimal rate (most of online workers are currently registered as unemployed with the National Employment Service and are entitled to state health insurance, so this minimum fee can be very attractive to the state). For pension insurance it would apply a progressive calculation method, with a mandatory reduction of the current rate as a starting point for those workers who have no income on another basis. In the case of workers is that they pay contributions on another basis, you can enter the voluntary payment of these contributions to the insured’s personal account ”, they explain.

Another important piece of information that must be defined are the costs that the self-employed have during their work, which should not be taxed in any way. These are, for example, the cost of professional courses, software licenses, the cost of purchasing and maintaining work equipment (computers, cameras, etc.), as well as the cost of facilities (in the US). For example, it is possible to recognize the cost of the workspace if you rent, and if it is part of your living space, it is recognized $ 5 per square meter up to 30 m2.)

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