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The Government of the Republic of Serbia

In the service of citizens

Severe penalties for disrespect of VAT regulations

Belgrade, 23 November 2005

Head of the Serbian Tax Administration Vladimir Ilic stated today that the Tax Administration has started to supervise taxpayers where certain irregularities concerning the Value Added Tax (VAT) had previously been found.

Vladimir Ilic

At a press conference, held at the Serbian government building, Ilic said that the Tax Administration has issued 157 warrants allowing the supervision of unregistered traders who nevertheless issue printed fiscal receipts to customers, or have a turnover of over two million dinars, and also of those who apply illegal tax rates or do not issue printed fiscal receipts.

He explained that these irregularities have been identified by means of terminal devices for remote readouts of fiscal registers (GPRS), and specified that 97,700 GPRS devices have been connected to the Tax Administration server so far. He added that more than 100,000 taxpayers are under obligation to use the GPRS device.

According to Ilic, penalties for not installing terminals vary from 100,000 to 1 million dinars for corporate entities, 5,000 to 50,000 dinars for the individual responsible, and 50,000 to 500,000 for entrepreneurs. The law also prescribes a possibility of imposing a ban on doing business activity for up to 60 days.

Ilic added that in the period January-October 2005, the Serbian Tax Administration has filed 1,105 criminal charges against 1,241 individuals, with the amount of unpaid tax totalling nearly 7 billion dinars, while the value of seized goods is 110 million dinars.

Ilic stressed that for the first time, three final non-suspended judgments have been handed down, sentencing the offenders to prison terms of two, three and 17 months, and recalled that until now only suspended sentences had been given in these cases.

Ilic announced decentralisation of the Tax Administration, which implies establishing local tax administrations responsible for collecting funds for local self-governments.

The director of the Tax Administration said that this institution is currently working on the introduction of income tax based on progressive tax rates, so that citizens with larger incomes will pay larger taxes.