Dnevni list: Director of the Federal Taxation Administration, Midhat Arifović, in the interview for "Dnevni list" speaks on the main reasons and advantages of application of the new Law on Income Tax and says that it is about the social tax which will bring an order in chaotic tax system in the Federation and finally enable that richer pay more. He also mentioned the problems of not paying the contribution, and the combat against illegal implementation of the lotteries in which the Taxation Administration is totally lonesome.
Can You present the reasons of introduction of the Law on Income Tax and the advantages they bring? Is the opinion about the fact that all is about the new impositions justified?
– The goal is to bring the Law which will in the Federation be equal for all. We had the federal Law on Income Tax, which was prescribing the rate of 5%, regardless of the height of salary and a number of children or aliment members. A worker was paying a tax no matter if his salary was 400 or 5.000 KM, which was not ok. By this law, the profits are being taxed in an unique way, and the cantonal taxes are being abolished, because we had a situation that for example a citizen from the Srednjo-Bosanski or the Zapadno-Hercegovački canton was not paying the tax, even though he/she could achieve the profit of 100.000 KM, while a citizen from another canton had to do it. That was a parody, because the rates and basis were different. So, the citizens were in an unequal position, and it should be said that by this law the previous tax on income for businessmen which usually was around 30%, is now being abolished. Even though our goal was to bring the unified law on the level of BiH, it is obvious that the International Community because of the political reasons in this moment cannot ensure it. The goal of this taxation is that rich people and those who have high incomes are paying. It is largely being talked about the social map and a question of rich and poor, but my opinion is that it is the time that the state level starts dealing with the introduction of different rates of the VAT. Apparently, while buying a product, the citizens are paying the tax regardless of how high their salaries are. Is that fair? The citizens practically suffer because of the possibility of some misuses of privileged rates, but I think that it is time for introduction of the lower and releasing rates for the basic groceries. When speaking of the new Law on Income Tax, it has been thought about the social categories. I do not say that this is 100% correct and just, and it should be worked on, perhaps change some parts, but I think that on the state level it is not just that those with small salaries buy the products with already included tax. It is time to explain the reasons why a differentiated rate of the VAT is not being introduced.
Do you expect the problems with application of the new Law, which has been previously recorded in the RS, and are there any thoughts on the adjournment?
– There is no adjournment! We have succeeded to adjourn the application of the law already once in order to prepare it better, because it is about a very complex law which contains a big number of data. It should be said here that because of the private data, this is a very sensitive area, so a special attention should be directed to safeguarding of data.
Chaos in interpretation of articles of the new law is being obvious. Why is it that way?
– We currently work on education and want to offer the answers to the questions around which there are still some dilemmas. Unfortunately, the campaign started late and it was not effective enough, and the rulebook itself arrived very late. This way we want to introduce the citizens to their obligation, which includes fulfilling the demands for issuing the tax card with correct data on aliment members of the family on whom they have the rights on the reduced tax basis. Also, the documentation should be collected as a proof for reduction of basis and all their obligations are stopping by this. The rest is on the employer. According to the estimation of the Ministry of Finance, more than 60% of employed, after using of exemptions and deductions will generally not have an obligation of paying the tax. It should be said how the payer cannot use his/her card for two work positions, but I would point out that in January payers can deliver their documentation. I am sad for the crowds, but I think that the majority has been done with this. Also, we have noticed that a big number of management companies seek the documentation which is not required, which generated the confusion among the workers. When speaking of the age of documents, of course, the birth certificates can be older than six months, but other documents as are the confirmation on education, it is logical that you cannot bring the confirmation five years old. The same applies to the list of household members.
Are the misuses because of the incorrect data, expected?
An employee and the employer know that they have to deliver correct data because there are sanctions for those who do not do it that way. It will probably happen that some employees, in order to reduce their tax basis, will as a member of their closer family show the parents and children with whom they do not live, or they would enter some other incorrect data. For example, it is possible that they show that the members of the household have the incomes lower than 300 KM per month, in order to achieve the exemptions. All the employees who enter such data, besides the financial penalty and violation sanctions, will also be responsible for a penalty according to the Law on Penal Procedure.