Proposal for Increasing the Threshold of Flat-Rate Taxation for Small Businesses
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Loading... - Imogen Fletcher
- 26 May 2023
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The Serbian Association for the Protection of Small Businesses and Companies has recently submitted a formal letter to the Serbian Ministry of Finance, presenting a compelling proposal to raise the threshold for flat-rate taxation and revise the calculation of Value Added Tax (VAT).
In light of the prevailing inflationary trends, the association recommends a significant adjustment by increasing the flat-rate taxation threshold from six million dinars to eight million dinars, as stated in their memorandum.
Furthermore, the association has urged the Ministry of Finance to consider elevating the VAT application limit from 8 million dinars to 10 million dinars.
Over the past few years, small business owners have consistently advocated for an upward revision of the flat-rate taxation threshold. Their persistent requests highlight the importance of addressing this issue.
In the previous year, Dragan Demirović, the Assistant Finance Minister, expressed doubts about the possibility of raising the threshold, despite its adoption nearly a decade ago. He emphasized that the current threshold is already among the most favorable in the region.
During that time, he also acknowledged that financial institutions within the European Union (EU) had reservations about the high flat-rate taxation threshold, citing a lack of alignment with relevant European regulations.
According to the existing Personal Income Tax Law, flat-rate taxpayers whose annual income surpasses six million dinars are obliged to maintain comprehensive accounting records either midway through the current year or at the commencement of the subsequent year.
