Public debate on the Draft Law on Fees for Using Public Resources

In cooperation with the Ministry of Finance and Economy and USAID Business Enabling Project, on February 28, 2013 at Hyatt Hotel, NALED organized a public debate for its members on Draft Law on Fees for Using Public Resources, which is the first in a series of debates on this Draft Law the Ministry will organize in the forthcoming period.

The audience was addressed by Darko Vukobratovic, Director of company Contango and NALED member, Joe Lowther, Chief of Party of USAID Business Enabling Project and Milica Bisic, Advisor at the Ministry of Finance and Economy.

Darko Vukobratovic, director of a company operating in mining sector said that, in addition to the financial effects of the Law, the state should also take into account the situation of our economy and businesses, since the fees are already too high. In his words, the new law on fees involves an increase of fee amounts in mining and will additionally burden the companies operating in this sector.

„It is good that all fees are consolidated at one place, and some of them will be increased up to 100%. In 2012 our mine had revenues of EUR 15 million and this year, based on various charges, we should pay into the budget more than EUR 4.5 million, which is about 30% of our revenues. With the planned increase of fees, our obligations will exceed 50% of revenues. We won’t be able to endure, and probably no one else from this industry. We only have two solutions – either tax evasion or closing of companies, which is not in favor for both Government and us. In case of our company this would mean a loss of 430 jobs and EUR 4.5 million for the budget. I hope this will not happen", added Vukobratovic.

Joe Lowther, Chief of Party of USAID Business Enabling Project emphasized that the new law will be a step forward towards transparency and improving the perception of businesses about the regulatory framework quality, bearing in mind that the last year survey shows a great percent (96%) of answers that the para-fiscal charges very negatively influence the business operations. Lowther emphasized that the businesses will now know exactly how much money they will have to pay for the fees and charges. He also added that in the following period the Ministry should pay attention to the harmonization with other sectoral laws, particularly those regulating fees not involved in this new regulation. Additionally, special attention should be paid to the methodology for determining the amount of fees, since this is an important matter for businesses, influencing its further growth. 

Milica Bisic, Advisor at the Ministry of Finance and Economy, pointed out that this Draft Law on Fees encompasses all fees paid by the businesses at one spot. The new law will also prohibit the practice of introducing new fees with other regulations.

„No individual law will be able to introduce a new fee any more. This was a problem because so far the businesses had to monitor all existing laws in order to know whether they have any additional obligations. This Law will consequently change more than 20 other laws", said Bisic.

She emphasized that the new act would not introduce any new obligations for companies nor increase the amount of existing ones. The goal is to provide businesses with predictability in business operations, as well as rational use of natural resources. According to her, the amounts of fees given in Draft Law are not final and they are still available for discussion since the implementation of new regulations is planned for early 2014. When it comes to increasing transparency and predictability for businesses, Bisic mentioned that one of the novelties would be the obligation of determining the amount of fees for the following year before 30th September of the current year, and their alignment with the inflation would need to be performed before 31st October. Some of the novelties include giving companies the right to complain to the Ministry of Finance and Economy about the determined amount of fee, as well as the right to complain to the Ministry about the lack of adopted by-laws or decisions within the determined deadline, and which are important for the application of Law.

In a round table discussion, comments to the Draft Law came from both businesses and local governments. The businesses were mostly worried about the amount of fees and possibility of their increase. It was pointed out that the system still has many hidden charges for businesses. When it comes to local governments, objections were made about the possibility for them to pass worse than the Republic in the distribution of income from fees. They warned that the fee amounts need to be determined very carefully, so that they don’t demotivate potential investors from investing. Additionally, local government representatives are concerned about the authority over the control and collection of fees. Municipalities also believe that the Draft Law is not in accordance with the Law on Utilities. Both businesses and local governments objected about the environment protection fee and its inclusion in the law, since, according to them, its nature makes it a dedicated tax. They also emphasized the problem of having many charges within regulations that are formally called fees, bit will not be encompassed in this Law.

 

 

 

 



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