With the New Year, Macedonians will have to handle higher taxes and a more complicated business regulatory regime. The decade long era of low flat taxes is over. Several new income tax rates of 15 and 18 percent will apply to capital and rental gains and to higher income earners.
Additionally, the retirement tax goes up 0.5 percent, in an attempt to stem the gaping hole in the state run PIOM retirement fund which currently stands at more than 300 million EUR per year.
The Government expects to collect 35 million EUR for the PIOM fund and 25 million EUR from the income tax hikes. Chambers of commerce warned the Government that it’s making Macedonia less competitive in the region and risks to see an outflow of both potential investors and companies currently operating in the country.
Another red tape move will see cash payments limited to only 1.000 EUR, from the current level of 2.000 EUR. Beginning in June, this will be reduced further to 500 EUR.
Farmers markets will say goodbye to retirees and people who are otherwise employed. They will no longer be able to operate at the farmers markets and will be banned when they apply for a selling booth, even if they have low retirement incomes or work somewhere part time and want to boost their modest and infrequent monthly salary by selling fruits and vegetables.
Another change in the business environment is the opening of the electricity market for households. Customers can choose between eight companies which will supply electricity, in a move that may have vast effects on the market prices.