ANALYSIS
Unfortunately, with the
exception of the Public
Revenue Office, we were
unable to obtain the concrete data these institutions
are supposed to track as part of the Action Plan in time
for publication.10
Along that line, CPRM notes that,
Grey Labor Threatens...
continued from page 7
Improved data sharing and coordination among government bodies is of utmost importance in combatting undeclared labor, together with an increase in the number
of incentives for suppliers to join the declared economy
and measures to increase public awareness on the risks
and downsides of joining undeclared labor market.11
Macedonia’s moves to discourage the cash economy
as well as reduce and simplify corporate taxes are addressed in another article in this issue, thus will not be
treated here. In addition to those moves, the country
greatly simplified procedures for opening a business as
well as introducing government incentives for company registration. However competition from unregistered businesses remains a significant issue. In recognition of this, a Memorandum of Cooperation was signed
recently, aimed at reducing unfair competition from unregistered entities in the particularly vulnerable transport and tourism sectors by the Macedonian Chambers of Commerce and the country’s new Inspection
Council. The MOU creates a project targeting inspection controls of unregistered entities and predicts that
a tough “repressive role” of inspection supervision will
help achieve a “voluntary harmonization” of business
entities with the law. To attain this result, the Inspection Council also plans to scrutinize the legal code for
problems and inconsistencies.
In addition to punitive measures, Macedonia appears
to be following Bulgaria’s lead by increasing the net
minimum wage, set at just 8,050 MKD ($143) in 2012
to 9,590 MKD January 2015 and 10,080 MKD ($180)
from January 2016. As a major employer, the government is also using its weight to raise wages informally
by, for example, announcing wage hikes for more than
10,000 police officers amounting to 20% in the next 2
years. And in December 2015, increased salaries were
announced for a number of healthcare professionals in
State institutions.
1 Source: http://www.nbrm.mk/WBStorage/Files/WebBuilder_Kalman_Filter_Estimation_of_the_Unrecorded_Economy_in_Macedonia.pdf,
page 1
2 A good example of this rigidity is the absence of part-time jobs in the country (at least formally). This is due to the fact that employers are
required to pay the same social contributions rates for full and part-time employees.
3 Source: http://www.telegraf.mk/aktuelno/makedonija/293935-stavreski-vladata-na-1-avgust-go-ukinuva-zakonot-za-honorarci
4 Source: http://www.balkaninsight.com/en/article/grey-economy-costs-dear-serbia-s-gdp
5 Source: http://ec.europa.eu/europe2020/pdf/themes/07_shadow_economy.pdf
6 Source: http://www.grey-project.group.shef.ac.uk/wp-content/uploads/2014/04/Tackling-the-Undeclared-Economy-in-Bulgaria-April-2014.pdf
7 Source: http://www.standartnews.com/english/read/pm_boyko_borisov_tackling_grey_economy_could_earn_bulgaria_bgn_1bn-7135.html
8 Source: www.mtsp.gov.mk (Google search for “Акциски план за сива економија 2015 година”)
9 Ministry of Labor and Social Policy; State Employment Agency; Ministry of Interior; Ministry of Finance; Ministry of Education and Science;
State Labor Inspectorate; Public Revenue Office; the Customs Administration and the Ministry of Economy.
10 We have included the UJP data in the article on page 15 of this publication.
11 Source: http://www.crpm.org.mk/wp-content/uploads/2015/01/PolicyBrief31_ENG.pdf, page 13.
Finally, in addition to regulatory measures, revenue authorities have the
greatest responsibility to limit the shadow economy.
The following OECD recommendations2 along this line,
help detail the ideal approach:
Smart Policies and...
continued from page 9
• Revenue bodies that presently do not have an
explicit overarching strategy … may wish to assess
the merits of having such a strategy, having regard
to their own compliance risk contexts.
• Revenue bodies are encouraged to review their
strategies for addressing tax non-compliance arising from their respective underground economies in
light of the information and practical experiences set
out in this note.
• Revenue bodies are strongly encouraged to be vigilant for evidence of tax non-compliance facilitated
by H \