Slovakia’s Fiscal System Comes with a Flaw?

A couple of the EU member states have adopted the new online fiscalization model – Croatia, Slovenia, and the Czech Republic being the first three to adopt this concept. They will be joined by Montenegro very soon, and Slovakia has just recently joined; or to be more precise, it joined only last year. 

The country transformed its long-term system which was based on fiscal memory into a new online model called “eKasa.” This was already announced in one of the SDC articles, and it was praised as something that would bring a lot of useful security benefits to taxpayers and the tax authority.  

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The War Against Tax Non-Compliance in Tanzania

Similar to many other developing economies in the world, Tanzania is also one of the countries that struggle when it comes to collecting taxes. Obviously, this is only the tip of an iceberg that goes very deep. The problem of citizens not paying their taxes is rooted in many other issues that span all over a political system.  

So why are Tanzanians not paying their taxes exactly? Well, one of the main problems until recently was the fact that the country’s tax collection system was entirely paper-based. This system comes with dozens of problems attached to it, and most of them coming from the fact a paper-based system is bureaucratic. This alone can cause many citizens to outright give up on the entire process. Moreover, this system causes a lot of corruption and revenue leakages.  

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The Reduction of Cash and Its Impact on the Grey Economy

As the world slowly but surely runs into the future, some everyday rituals and tools are destined to become unnecessary. And, according to Denmark and Sweden, cash seems to be one of those things. Scandinavian countries, faster than any other, are moving away from cash and are using cards and e-wallets a lot more.  

Naturally, this is not a trend most countries follow – cashless society is not an idea many nations deem good. Luckily for everyone, Denmark has managed to balance the situation well, and unlike Sweden, it decided not to forget about physical money just yet.  

Which System Does Denmark Use? 

Denmark’s neighbor, Sweden, has already forgotten all about cash, and today, the country takes great pride in being the first cashless society ever. The Swedes seem to enjoy this system just as much as their government. However, each country makes transitions at its own pace, and so does Denmark. 

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Montenegro Joins the Invoice Verification Club

As of January 2021, Montenegro is replacing its 19 year old electronic fiscal system based on fiscal memory modules with a new one, which means that the Montenegrin consumers will be able to validate and report their invoices to the Tax Authority. More precisely, the customers will be able to check whether the VAT  included in the price they had to pay was really declared to the tax authority, or if the taxpayer decided to illegally keep it. In doing so, Montenegro is joining a club of countries that already do invoice verification;

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COVID-19 and Fiscalisation

32228472408Very soon after the official announcement of the virus COVID 19, it was clear that its consequences, in addition to the medical ones, would greatly affect the economies of all countries in the world. The rapid spread of the infection around the world has led to quarantines of various forms and levels as well as a reduction and very often a complete cessation of production.

The immediate consequence of reduced production is a drop in collected taxes and an increase in the number of unemployed. Taxes are certainly the biggest input to the budgets of both the state and local areas. Employers have found themselves in a situation where they cannot pay salaries nor taxes.

The first and most frequently mentioned words related to the tax policy of each country in the previous period are “DELAY” and  “MEASURES.”

Measures include:

  • up to X months’ delay on VAT payments
  • extending VAT returns and payments to month X
  • delaying VAT returns for small businesses
  • providing VAT payment break till end of month X for small enterprises.
  • postponements on returns.
  • relief for small VAT payers. Limited VAT reliefs
  • VAT credit refunds and suspension of penalties.
  • providing VAT filing and payments delays
  • reporting period changes or payment delays.
  • exempting small taxpayers from VAT
  • delaying VAT filings by XX days
  • VAT rate cut for COVID crisis
  • VAT rate cut on hospitality services will be from X% to Y%
  • Discounts on VAT payments
  • increasing VAT credit limit.

 

How Covid 19 Influenced the Fiscalization Process

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