1st September 2022 – Today, Minister of Finance, Fatmir Besimi presented the tax reform concept, with the Ministry of Finance having opened a broad public debate therefore, to the representatives of political parties and international foundations. As in all previously held meetings within the public debate, PRO management and Customs Administration management also attended the meeting.
“We have commenced a process of broad consultations and debate with all stakeholders. It is the basis for a democratic country as is the Republic of North Macedonia, also being a tool for designing solutions to be supported and sustainable in the long run. Various opinions, views, arguments have been presented throughout the consultations. Today, we are going to hear yours as well. I believe that through such consultative, inclusive and transparent debates we will come to a systemic solution leading us to the ultimate goal, which is establishing a fair, efficient, transparent and modern tax system in the long term”, Minister Besimi said.
He also said that consultations for the process commenced back in 2020, in parallel with the analyses of the tax system performance and the needs for its strengthening, hence the proposed concept is not an one-off solution adopted in times of crisis with an ultimate goal of increasing the budget revenues.
“Tax rates, in particular share of tax revenues in GDP in North Macedonia, are lower compared to the EU Member States and the countries in the region. Considering we are a country aspiring to meet the EU standards and the quality of public services, changes are necessary. That is why we have commenced this process by adopting the Tax Reform Strategy and, through a comprehensive approach, we have come up with the most optimal solution”, the Minister underlined.
He pointed out that the reform is important for the future economic growth and fair taxation, expecting, through a constructive dialogue, for the reform to be supported. It will be defined once the debate is over and all stakeholders are heard.
“This reform touches upon all of us. Each and everyone is a taxpayer and the whole picture is to be take into account, i.e. the goal we want to achieve, putting aside the personal interests. This contributes to the general prosperity of the country”, the Minister said, adding that political parties represented in the Parliament are expected to extend their support as was the case previously with the Law on Financing Local Government Units and the Organic Budget Law.
“This indicates that we are not striving just for an improved revenue collection, but also for reforms aimed at greater efficiency and transparency for as how the collected revenues are spent. Under the new Organic Budget Law, fiscal rules are introduced pertaining to the budget deficit, the level of public debt, mechanisms for more efficient spending of budget funds, with the fiscal decentralization also being strengthened”, Minister Besimi underlined, adding that measures are also being undertaken to reduce the informal economy, i.e. measures that will contribute to formalization of the informal economy.
During the meeting, initiative for a debate about the tax reform concept was assessed as a positive contribution to presenting different opinions and their incorporating in the final solutions.
Tax reform concept is based upon the five priorities defined in the Tax System Reform Strategy (2021-2025): greater fairness as regards taxation; greater efficiency and effectiveness of the tax system to the end of improved revenue collection; increased tax transparency; better quality of services, and affirmation of an environmentally-friendly tax policy.
It is a reform to be implemented gradually in the period 2023-2025, containing all recommendations of the international organizations. The public debate started at the beginning of this month.