Wednesday, 19 December 2018 | News today: 16

American Chamber of Commerce strongly opposes introduction of progressive taxation

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American Chamber of Commerce in Macedonia roundly criticized the proposed new law that aims to re-introduce progressive taxation, saying it will reduce productivity and employment, will increase tax evasion and black market economy and overall negatively impact economic growth.

– The American Chamber of Commerce strongly opposes the failure to comply with the public consultation process by the Government and the Ministry of Finance regarding the Draft Law on Personal Income Tax, published on November 3rd, without having to respect the deadline for remarks and comments ending on November 28th. The law has already been put in parliamentary procedure on November 26th in a short procedure, which also violates the right of the interested parties to publicly express their opinion before the MPs in the Assembly, AmCham said in a press release.

This new law will increase income tax to 18 percent (up from 10 percent) for those earning over 1.500 EUR and a 15 percent rate will be applied to dividends, deposit gains and other financial incomes. Beginning with 2020, this rate will also apply to incomes from bank deposits.

– AmCham believes that progressive taxation will not achieve the desired effect to reduce income inequality, but will reduce productivity, employment and investment in highly skilled workers. We also believe that the law will increase tax evasion, lead to more difficult tax collection and new costs to taxpayers. We believe that the draft law will negatively impact growth and development of Macedonia’s economy, will lead to capital outflows, reduce investments, cause brain drain and reduce stimulus to grow innovative, smart industries which create best paying jobs and move the economy forward, AmCham adds in its scathing review of the draft law, which was promised by the SDSM party to its supporters ahead of the 2016 elections.