REQUEST FOR AMENDMENTS IN THE DRAFT LAW ON PERSONAL INCOME TAX
At the initiative of the National Youth Council of Macedonia, the Youth Educational Forum and the Center for Intercultural Dialogue, a group of civil society organizations submitted a request for amendments in the Draft Law on Personal Income Tax to the Minister of Finance Mr. Dragan Tevdovski.
In addition, you can read the content of the request.
We hereby address you with a request to change one of the items in the proposed amendments to the Law on Personal Income Tax. Specifically, the proposed amendments to the law propose an amendment that will have a negative impact on the work of the citizens’ associations and organizations, and most of all on the youth organizations and organizations for youth.
More specifically, we are referring to item 41), paragraph (1) of Article 12, Fees for which no income tax is paid: 41) fees for accommodation, food and transportation for persons participating in events lasting no more than 5 days , organized within the activities of the organization established in accordance with the Law on Associations and Foundations, determined on the basis of documents for the expenses incurred; This item introduces payment of income tax on accommodation, food and transportation for participants in events lasting more than 5 days organized by organizations established according to the Law on Citizens’ Associations and Foundations. We believe that this item should be changed and should refer to all events without any time limit. The reasons why we ask for this are the following:
1. The introduction of taxation for events over 5 days will have the greatest impact on youth organizations and organizations for youth. Young people in Macedonia are facing many challenges – unemployment, low standard, fewer social and cultural opportunities and other factors that result in disappointment, hopelessness and high rates of emigration of the young people from the country. Youth organizations are among the ones that do the most to overcome these problems and provide activities for young people that improve their lives and personal development – from public events to numerous trainings, workshops and exchanges. Many of these activities last over 5 days. This taxation will directly affect young people in the country and youth organizations working hard to make their lives better. The tax will reduce budgets for activities, thus result in reducing the number of young people that would benefit from the afore-stated activities.
2. There are many activities for young people organized by civil society organizations that last more than five days. This includes activities organized with the support of the Regional Office for Youth Cooperation (RYKO), the European Youth Foundation of the Council of Europe, Erasmus+ and other programs. This tax will reduce the number of beneficiaries who can use the programs or reduce their length, which will affect the quality. As an illustration, in this letter we hereby enclose the activities which according to the guidelines for their implementation are significantly longer than 5 days.
3. It is unclear where the proposal for taxation of these costs for events over 5 days (or 3 days as stated in the first draft law, published for ENER comments) comes from. We would like to ask you on the basis of what analysis has this deadline been defined? The Regulatory Impact Assessment also does not explain this change.
4. It is illogical that in the same draft law, trade unions are completely exempt from these taxes, while they are introduced to citizens’ associations and foundations. On the basis of what analysis has the conclusion been reached that the trade unions should be exempt from this cost and the citizens’ associations and foundations should not?
6. Last year, with the amendments to the same law from 1.1.2018, it was clarified that this tax was not to be paid for such activities. These changes, less than a year later, propose the introduction of this tax. On what basis was this assessment made? We remind you that such ad hoc unplanned changes contribute to creating an unfavourable and unreliable legal environment for the work of citizens’ associations in Macedonia.
7. Amending laws without any previous notice and public debate increases the legal uncertainty of associations. There are projects that have been going on for many years and are already being implemented. Such a measure will create additional problems in their budgeting. It will affect the planned activities, bring about budget rebalancing and result in consequences for the work of organizations and the assumed commitments before the donors.
8. Such fees (accommodation, food and transportation of participants in events organized by organizations established under the Law on Associations and Foundations) are necessary expenses for the realization of the activity of the associations, and in no way fall under the category of personal income of the participants in the events and other persons participating in them (many of whom are often minors), and should not be taxed with the personal income tax.
Due to the afore-stated reasons, we ask you to correct item 41), paragraph (1) of Article 12, to remove the time limit and to read: Fees for which no income tax is paid: 41) reimbursement costs for accommodation, food and transportation for persons who are participants in events, organized as part of the activities of the organizations established in accordance with the Law on Associations and Foundations, determined on the basis of documents for the costs incurred; We believe that if the proposed amendment in the law on taxation of the costs for accommodation, food and travel for events over 5 days organized by citizens’ associations and foundations remains, the civil society organizations and beneficiaries of their activities will bear the consequences. Youth organizations and young people who use their programs will be especially harmed. We believe that we have succeeded in providing arguments as to why this proposal is unfounded and lacks the support by any analysis, goes against the existing programs conducted in Macedonia and does not go in favour of the young people.
Our country and its institutions should put the young people first, as one of the socially endangered groups and a category that is leaving the country en masse. Instead of putting young people and the work of youth organizations as a priority, such an amendment only damages their opportunities and work.
The request is supported by 87 organizations. The full address as well as the names of all organizations that support the request can be found here.