SDSM and its ruling majority in Parliament overruled complaints from the private sector and on Monday adopted the law which re-introduces higher, progressive taxation beginning with January 1st 2019.
While the 10 percent rate remains in place for smaller companies and lower income earners, a new, 18 percent rate will affect all those who earn more than 90.000 denars (1.475 EUR) per month, or 1.080.000 denars (17.700 EUR) per year.
A third tax rate of 15 percent will be applied to revenue from rental properties, dividends and capital gains, lottery and other similar forms of income.
The retirement tax is increased from 18 to 18.4 percent and is set to increase further to 18.8 percent of the gross salary in 2020. The healthcare tax will rise from the current level of 7.3 percent of the gross salary to 7.4 percent in 2019 and 7.5 percent in 2020.
All chambers of commerce, including the American chamber AMCHAM appealed to the Government and the majority in Parliament to drop this tax hike warning that it will only increase tax evasion and cause reduction in incomes. Among those most vocal against the law are the freelance IT specialists who are also expected to invest in ways to avoid getting taxed.