AmCham Macedonia Summer 2017 (Issue 54) - Page 21

Analysis Summer 2017 / Issue 54 New government commitment: Increase educational quality over quantity. New government commitment: Change the approach of inspections from one of fines and other punishments to one of prevention and education. AmCham stance: We have argued that public investments in education were largely limited to improvements in physical infrastructure and opening new schools and universities. While this may be a very necessary activity in a country with aging pub- lic education infrastructure, public investment is at least equally needed in teacher training and the introduction of modern teaching texts and other learning materials. This is particularly necessary in technical and vocational edu- cation institutions, which are meant to produce tangible skills that align with the local labor market. While the very high graduation rate from the country’s higher educational institutions is often cited as proof that the country’s labor force is highly qualified, businesses working here gener- ally agree that the skills gap is widening. AmCham stance: We have called for increased transparency on the issu- ance of fines (e.g., which types of entities are being fined and for which types of offenses). Ideally, inspec- torates would regularly publish case studies and other instructional materials on issues for which companies are commonly being fined, to help increase voluntary compliance. Further, we have called for each of the country’s 28 State institutions that carry out inspec- tions must have a functional web site, where they will publish a relevant laws, sub-laws and internal proce- dures that are necessary for companies to understand their work and to be able to contact them with open questions. For example, today, the State Inspectorate for Agriculture has no online presence whatsoever. New government commitment: Increase data transparency as a check on government. AmCham stance: We have argued that, to avoid creating a business environment where companies are considered guilty before being proven innocent, complaint and appeal mechanisms must be consistent, transparent and efficient. Thus, reform is needed to prevent abuse of companies by indi- vidual inspectors by increasing the transparency of institutional han- dling of company complaints and ensuring best practices are being applied. Such measures would pro- vide internal and independent over- sight of appeal mechanisms and publishing of detailed data on com- plaints received from companies. As part of this reform, it’s critical to increase the transparency of the work of the Administrative Inspec- torate; in the absence of concrete information about its workings, companies doubt that it is carrying out its intended function. New government commitment: Provide full protection of intellectual and industrial property rights in the IT sector. AmCham stance: Our members have argued for some time that the State Market Inspectorate (SMI) should be one of the country’s most important enforcement institutions when it comes to tackling the grey economy (including protection of IP). However, SMI has virtually no budgetary resources needed to properly carry out its mission. Similarly, the current State Office of Industrial Property (SOIP) struggles to perform even it’s most basic function of processing patent and trademark applications; in the 2003-2014 period, SOIP managed to process an average of just 20% of the applications they received. This means that a backlog of thousands of existing trademarks (many of them glob- ally-recognized) have yet to receive basic recognition of their rights in Macedonia. We believe Government efforts to encourage innovation among local companies must begin by efficiently recognizing and protecting those that are already here. New government commitment: Parliament will publish official, consolidated texts of laws according to sug- gestions made by NGOs, unions and chambers. AmCham stance: Too often, companies are forced to work from unofficial versions of laws that are manually pieced together with amendments either by private service providers or company employees. This practice exposes companies to unnecessary legal risk and favors large organizations that have the resources to manage this difficult process. For example, the Law on VAT was not officially consolidated between the years 1999-2013, despite many amendments to it during that time. Similarly, a consolidated version of the Company Law has not been published since 2004. Thus, reform aimed at reducing regulatory confusion in Macedonia’s busi ness envi- ronment should include the creation of a process that ensures that the responsible Parliamentary Commission publishes official, consolidated legal texts for general public use within 1 month of any and all amendments. Longstanding issues that I found entirely missing from the Government Program include the: Conflicts and contradiction between legislation currently in force; Need for measures to help increase the number and quality of company-based internship programs; Chronic underinvestment in enforcement institutions that fight the grey economy and protect consumers, in particular, the State Market Inspectorate; Need for general alignment of tax legislation with the requirements of the global digital transformation and global taxation; and Review of para-fiscal charges, taxation and penalty policies to ensure they are rational and fair. AmCham Macedonia Magazine 21