I invite readers to write on the website what they think about the proposal to withhold tax payments to the Tax Administration, which does not fulfill its obligations to taxpayers until Minister Šuker leaves.
writes Ivica Grčar
[email protected]
A reader contacted me who debates the recently published research in the daily press about the ‘grey economy’ and how ‘the deficit in the state budget has largely been caused by everyone working illegally and not paying taxes.’ This reader’s reaction to the presentation of a complicated problem in a tendentious and one-sided manner is normal. I believe that the increase in the ‘grey economy’ in Croatia recently could equally be explained by completely opposite claims. For instance, it could be seen as a form of ‘self-defense’ by taxpayers against the arrogant and incompetent Tax Administration of the Ministry of Finance. This is especially true for about 70,000 employees who do not receive salaries (and the Tax Administration has not collected taxes and contributions from their employers for several years). Most workers who do not receive salaries obviously do not live from legal work, but from illegal work (or side jobs).
Survival It is good that ‘workers without salaries’ have managed to avoid paying taxes to a state whose corrupt officials also do not do their jobs. Everyone who has not been able to manage in this way will have to receive social assistance (which is paid from taxpayers’ money). Hypothetically, if it were possible to completely eliminate illegal work in Croatia, about half a million people would be left without any income for survival. This includes the unemployed (everyone, not just those who are formally registered), but also at least another 150,000 supposedly employed individuals who either do not receive salaries at all or receive ‘pocket money’ that is objectively insufficient for survival.
All these people are doing something ‘and not paying taxes.’ However, the ‘deficit in the state budget that must be covered by everyone who works legally and pays taxes’ has not only been caused by those who, because they do not receive salaries, earn a little something illegally. This deficit has been caused to a much greater extent by those who acquire wealth illegally and the incompetent Tax Administration of the Ministry of Finance, whose corrupt officials do not collect taxes from those who become very wealthy (without work in general, not just from illegal work). Furthermore, tax officials have not collected due taxes or contributions from privileged company owners, such as those from INA, Kamenski, and others, for several years. About 12.5 billion kuna of due and unpaid taxes and contributions exist in Croatia. Croatia is, just to remind, probably a unique country in the world for having adopted a special law on the collection of due and unpaid taxes, customs duties, contributions, and state guarantees, as if it had not been prescribed before the adoption of that law that all of this must be paid.
