Republika Srpska has the lowest rate of income tax in Europe and it is only ten percent, but this is not attracted to foreign investors, but allows capital owners to become even richer. Economist Predrag Mlinarević says that there is no tax on the dividend in Republika Srpska.
Millionaire production
– It should be made analysis and disallow that people are rich in something in something wherein nowhere in the world is not possible. There was a competition between countries to make their economic space more attractive to foreign investors by lowering income tax rates, in which Serbia was leading to Mlinarević.
He added that another problem is a low income tax rate, which affected the affirmation of informal payments. He says the employers pay more to pay the workers on their hands for distortion between contributions on salaries and profit taxes.
– If the government wants to reduce informal payments, then it is necessary to increase the income tax rate, in order to enable greater competitiveness and that employers are then indeed paying legal. Millionaires dealing with nothing special, in activities that are not particularly sophisticated, instead of helping the economy through tax incentives for reinvestment and to be awarded those who invest in research and development, Mlinarević said.
Mlinarević says that the social dialogue and amendments to the law are needed. This would allow themselves to prevent occurrences such as informal payments. Thus, he would be systemically punished by one who is opting to deal with some resource intensive production, based on the labor force and in which there is a huge profit due to the low payment of workers.
Such employers, at low income tax rate, become rich very quickly. These solutions would be said that they could not be millionaires if they deal with the quill jacket because the workers are poorly paid. If you want to be rich, they will make you improve that production, to make a new product, to raise the level of what you do, Mlinarević pointed out.
Economist Svetlana Cenić believes that you should think about the progressive rate of taxation. She pointed out that the income tax is low, because the government wanted to act stimulating to come to foreign capital.
Condition in the region
– When a comprehensive fiscal reform is performed, which will never happen, then it should really be thought about the progressive tax rate. So that one who has more – more and salary. The fact must be taken into account that the previously reinvested profit has not been taxed. The reinvested profit would mean more jobs or at least the larger salary, Cenic said.
In Serbia, the tax on profit is 15 percent, and the basic tax rate on dividend is also 15 percent. In Croatia, the income tax is 10 percent if revenues are less than one million euros, and 18 percent if the revenues are higher. In addition, interest income and dividends for realized revenues during payment, 12 percent of taxes are automatically rejected, exempts.
