The Slovenia Times

PM Wins Backing for Measures to Combat Shadow Economy



The proposed measures include broadening the powers of inspection services, fines for illegal builds and a law against moonlighting, Bratušek said after a session of the Economic and Social Council, the country's main industrial relations body.

The prime minister said the social partners had a number of proposals for tweaking the planned measures, which the government would review before taking a final decision on the programme for combating the shadow economy next Thursday.

In addition to broader powers for inspectors and a moonlighting law, the government is also planning to introduce a super tax on undeclared income in the first phase of the programme.

It would appear, however, that tax-certified cash registers are not planned by the government initially. The introduction of such registers has been called for by representatives of trade unions and some of the employers' organisations.

Bratušek said she was confident that a law prescribing special software which prevents companies from deleting receipts they have issued would bring the desired effects. If not, the government would consider taking additional measures.

Prior to the session, representatives of employers and trade unions said the government had to put forward concrete measures for fighting the shadow economy, which in their opinion represents a major problem for the country.

Head of the Confederation of Public Sector Trade Unions Branimir Štrukelj said that high fines must be levied against those failing to pay taxes. People in countries with lower rates of shadow economy are not more honest, they are scared of the high fines, he argued.

Moreover, Štrukelj said that politicians must act as role models to the people in paying taxes. "Unfortunately it is the politicians who are the ones who usually show people how to dodge laws and avoid paying taxes."

Bratušek said that the government was very serious about measures to fight the shadow economy and would take steps to raise awareness among people that paying taxes was the right thing to do.

The Chamber of Commerce and Industry (GZS) meanwhile expressed support for building more effective inspection services in Slovenia.

GZS representative Tatjana Čerin added that the chamber also supported tax-certified cash registers in principle, while it had several concerns about the proposed moonlighting law.

Finance Minister Uroš Čufer told the press after the meeting that there was no silver bullet for tackling the shadow economy, which is why the government was drafting a series of measures.

He added that some work had already been done by using the capacities freed up in the Customs Administration after Croatia joined the EU to inspection services. The next step is to give inspectors broader powers, he said.

Meanwhile, Agriculture Minister Dejan Židan said that Slovenia must strive to halve the extent of the shadow economy. "People who don't pay taxes are burdening those hard-working people who are honest and pay their taxes," he said.

He pointed out that assessments about the extent of the shadow economy vary, with domestic calculations from the Statistics Office putting it at EUR 4bn, whereas calculations from the Organisation for Economic Cooperation and Development assessed it at EUR 8-10bn.

"Experience from other countries shows that every EUR 1bn of the shadow economy eliminated represents EUR 100m in additional revenues for the state," Židan added.


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