New Attempt at Reforming Non-Tax and Parafiscal Charges – Single Model for All Towns and Municipalities and Collection Through eGovernment Proposed

Nearly two years have passed since NALED, KPMG, the Mihajlo Pupin Institute and Partner Solutions, with the support of USAID, prepared the register of non-tax charges and listed over 2,000 charges paid by the citizens and the economy and handed it over to the Ministry of Finance. The aim was for the competent ministry to turn it into an official list of all fees and compensations and open the way toward a reform of non-tax charges and the removal of parafiscal charges. The epilogue is that we still don’t have a public register, and the number of fees, compensations and parafiscal charges has not lowered either.

Considering that the Ministry of Finance has pointed to the complexity of establishing and maintaining the register of non-tax charges several times, NALED now proposes an alternative solution which is in line with the government’s goals, which reduces the administrative procedures for the economy and the citizens, and which enables the realization of the goals of the reform of non-tax charges, such as a greater predictability of doing business and a reduction of costs, in the long term.

– We propose for an obligation to be proscribed for organs to enable the collection of all non-tax charges electronically on the eGovernment Portal. We would thereby indirectly create the list, because we would have the all the charges and their amounts listed, as well as the formulas determining their amount. On the other hand, the citizens and the economy would be left with the possibility of paying them in a post office or a bank too – says the program director of NALED, Jelena Bojovic, and adds that, to implement that obligation, it would be necessary to amend the Law on the Budget System.

When it comes to regulating the collection of non-tax charges which are the responsibility of local self-governments, NALED’s proposition is to proscribe the single model of the Decision on Local Administrative Fees for all 145 towns and municipalities which have the authorization to collect non-tax charges. The practice of introducing and determining the fees would thereby be evened out, and the local self-governments would not lose income, whereas the citizens and the economy would get transparency and predictability of the costs they face.

– And the third proposition is to support the Republic Secretariat for Public Policies in the further development of the register of administrative procedures and to link all the procedures, for both the economy and the citizens, with the fees or compensations that have to be paid, through that register. It is also important for this register to be linked with the eGovernment Portal and the ePay service – Bojovic adds.

The idea of NALED is to realize this initiative in phases, that is, to first choose one local self-government and one state organ for which the payment of non-tax charges from within their responsibility would be introduced on the eGovernment Portal, whereby the Office for IT and eGovernment would develop the software solution for the payment service. Parallel with this, the Law on the Budget System should be amended, with the proscribing of a phase-based access by groups of organs for which a system of the electronic payment of non-tax charges would be established for a two-year period.

Establishing the possibility of the electronic payment of fees and compensations on the eGovernment Portal would also open the space for the preparation of an analytic tool which would enable an automatic listing of all the fees, compensations and other non-tax charges, as well as more detailed analyses of the costs of carrying out the procedures or providing a certain service by the users of public funds, to the end of a further upgrading of the current system of non-tax charges.

Within the Project for the Reform of Non-Tax Income, NALED, KPMG, the Mihajlo Pupin Institute and Partner Solutions have determined that the fees, compensations and other non-tax charges are proscribed in around 500 different laws, as well as in around 400 decisions of local self-governments. There are over 1,200 charges for which the authorities on the republic level are responsible, whereas the number of the charges collected by local self-governments is unknown, considering that not all the decisions on local administrative fees are publicly available

Among the non-tax charges, the most numerous ones are fees (75% of the total number), although they comprise only 25% of the collected revenues in total. During the project, recommendations for the removal of certain fees, the reduction or equalization of their amount and the changing of their names in line with their actual fiscal nature, that is, the reclassification into taxes, were prepared. The key recommendation in all these analyses pertained to the establishment of a public electronic register of non-tax charges (fees above all) of all authority levels, with compliance with the principle that no charge can be collected if it is not entered in the register.

NALED Beograd

Institut Mihajlo Pupin doo Beograd

KPMG d.o.o. Beograd

Partner Solutions doo Beograd

USAID Srbija

Ministarstvo finansija Republike Srbije

Republički sekretarijat za javne politike

NALED

KPMG

Mihajlo Pupin Institute

Partner Solutions

USAID

Ministry of Finace

Republic Secretariat for Public Policies

Jelena Bojović

register of non tax charges

Law on the Budget System

Project for the Reform of Non Tax Revenues

parafiscal charges