The difference between payroll taxes collected

 Lower tax rates are an admission of this fact and a legalization of parts of the black economy. The difference between payroll taxes collected on cash salaries and lower payroll taxes collected on noncash salaries &China Terminal Blocks Company; should be recovered by imposing a levy on all cash withdrawals from banks. The government is advised to turn a blind eye to it for it is a blessing in disguise. The Tax code needs to be simplified. The numbers of tax inspectors should be substantially increased and their pay considerably enhanced. The black economy is a cash economy. All citizens should be obliged to file annual, personal tax returns (universal tax returns, like in the USA). A departmental incentive system should be instituted involving a percentage of the intake (monetary fines levied, goods confiscated, etc. The account-holder will be obliged to furnish the bank with a monthly list of checks he or she issued and their details (to whom, date, etc. Suspicious transactions (for instance, transactions which exceed the financial wherewithal of the client involved) should be duly investigated. It plods on: doing business and helping the country to survive the double scourges of transition and Western piousness and patronizing. Judges have to be trained in tax laws and the state tax authorities should provide BINDING opinions to entrepreneurs, businessmen and investors regarding the tax implications of their decisions and actions. Bureaucracy should be pared down drastically. Customs and Duties Ideally, the customs service should be put under foreign contract managers. 

Special courts for taxes, for instance, are a good idea (see recommendation below). I follow with an analysis of two products, which are often abused in this manner. They lost their export markets, they are technologically backward, their unemployment skyrockets, their plant and machinery are dilapidated, their infrastructure decrepit and dysfunctional, they are lethally illiquid, they become immoral societies (obligations not honoured, crime flourishes), their trade deficits and budget deficits balloon and they are conditioned to be dependent on handouts and dictates from various international financial institutions and donor countries. One way to prevent this is to place sugar on the list of LB (import licence required) list, to limit the effective period of each licence issued, to connect each transaction of imported brown sugar to a transaction of export, to apply the world price of sugar to customs duties, to demand payment of customs duties in the first customs terminal, to demand a forwarder's as well as an importer's guarantee and to require a certificate of origin. Government Tenders Firms competing for government tenders should be obliged to acquire a certificate from the tax authorities that they owe no back-taxes. Their decisions should be appealed to the Supreme Court. Later these raw materials are either sold outright in the domestic or international markets or bartered for finished products (for example: paints and lacquers against furniture or sugar against chocolate). The PRO should register the contract and issue an immediate tax assessment. Thought should be dedicated to the possibility of employing independent laboratories to determine norms and supervise them.). The government can reduce payroll taxes if the salary is not paid in cash (for instance, by a transfer to the bank account of the employee). Without the black economy, the population of Macedonia would not have survived. Cash withdrawals should be subject to a withholding tax deducted by the bank. People will bring their money back to open businesses, to support family members and just to consume it.) All retail outlets and places of business should be required to install – over a period of 3 years – cash registers with "fiscal brains". Experience in other countries shows that circa 15% of the money "floats" in the recipient country and is used to finance consumption. 

The same goes for Cooking Oil (which – when it is imported packaged – is often declared as some other goods). Countries in transition are a private case of emerging economies which are a private case of developing countries which used to be called (in less politically correct times) "Third World Countries". Up to 10% of the intake or seizure value related to the information provided by the informant should go to the informant. The emphasis is on the word "market". The informal economy is an important pressure valve for the release of social pressures, it ameliorates the social costs inherent to the period of transition and it constitutes an important part of the private sector. The money generated by these activities is largely held in foreign exchange outside the banking system or smuggled abroad (even through the local banking system). In this sense, it defies the dictates of "we know better" institutions such as the IMF. Even economic theory admits that any dollar left in the hands of the private sector is much more efficiently used than the same dollar in the hands of the most honest and well meaning and well planning civil servant. Norms should NOT be determined according to statements provided by the factory - but by a panel of experts. The interest paid on cash balances and savings accounts in the banks should be increased (starting with bank reserves and deposits in the central bank). Databases and Information Gathering Estimating the informal economy should be a priority objective of the Bureau of Statistics, which should devote considerable resources to this effort. Use of the payment cards should be mandatory in certain business-to-business transactions. The same withholding tax should be applied to credits given against cash balances or to savings houses (stedilnicas). Workers in a factory owned by the state or in the government service cannot avoid paying taxes. This transforms checks into a kind of cash and checks are used as cash in the economy. The law should allow for greater fines, prison terms and for the speedier and longer closure of delinquent businesses. Anti-dumping levies and measures, fines and criminal charges should be adopted against exporters colluding with importers in hiding imported goods or reducing their value. They suffer from all manner of acute economic illnesses. Black economy, in short, is very positive. All taxis should be equipped with taximeters, which include a printer. It all depends on the mood and on the atmosphere and on how much these people feel that they can rely on the political stability and rational management. Tax arrears and especially the interest accruing thereof should be the first priority of the ZPP, before all other payments. This way, discrepancies between personal tax returns and other information can lead to investigations and discoveries of tax evasion and criminal activities. The self-employed and people whose main employment is directorship in companies should be given the choice between paying a fixed % of the market value of their assets (including financial assets) or income tax. A tax assessment should be issued by the tax authorities, appealed internally (within the PRO), taken to a tax court session (by a plaintiff) and, finally, appealed to the Supreme Court (in very rare cases). Checks should be valid for 5 working days only. To restore progressivity, the government should directly compensate the poor for the excess relative burden. The tax authorities and the Public Revenue Office (PRO) should have unrestricted access to ALL the registers of all the registrars. All other juridical and appeal instances should be cancelled – except for an appeal instance within the PRO.) Hiring and firing procedures in all the branches of the tax administration should be simplified. It is, however, illegal to hide the income generated by these activities and not to pay tax on it. Release of the goods and exiting the physical location of the wholesale market should be allowed only against presentation of a ZPP payment slip. Customs and tax inspectors should inspect these receipts periodically. In the case of exports or payments from abroad, invoices which include a discount of more than 25% on the list price of a product should be rejected and assessment for the purposes of paying customs duties and other taxes should be issued at the list price. Governments all over the world distort economic decisions and misallocate scarce economic resources. The banks can withhold the tax and transfer it to the state monthly. Gradually, submissions of financial statements, tax returns and wealth declarations should be computerized and done even on a monthly basis (for instance, VAT statements). The chips are built to save a trail (detailed list) of all the transactions in the place of business. An obligation can be imposed to oblige businesses to effect payments only through their accounts (from account to account) or using their debit cards. The citizens should be made to understand what is a budget, how the taxes are collected, how they are used. Currently, checks issued to account-holders by banks are virtually guaranteed by the issuing banks. Law Enforcement Tax inspectors and customs officials should receive police powers and much higher salaries (including a percentage of tax revenues). Billions are transferred to the outside world (mostly to finance additional transactions, some of it to be saved in foreign banks away from the long hand of the state). They pay taxes. All exchange offices should be obliged to issue receipt for every cash transaction above 100 DM and to report to the Central Bank all transactions above 1000 DM. It is recommended to assign tax inspectors to the public prosecutors' office to work as teams on complex or big cases. Such enormous flows of capital happened before: in Argentina after the Generals and their corrupt regime were ousted by civilians, in Israel when the peace process started and in Mexico following the signature of NAFTA, to mention but three cases. Industrial norms (for instance, the amount of sugar needed to manufacture a weight unit of chocolate, or juice) should be revamped. In the USA "black" means "profitable, healthy" and this is what the black economy is. Seizure and sale procedures should be specified in all the tax laws and not merely by way of reference to the Income Tax Law. It fosters economic activity and employs people. This lesson must be remembered as the government prepares to crack down on the only sector of the economy which is still alive and kicking. Emphasis should be placed on VAT, consumption taxes, customs and excise taxes, fees and duties. Market prices should be determined as the moving average of the last 100 rental contracts from the same region registered by the PRO. All property rental contracts should be registered with the courts. 

Alternatively, stedilnicas should also be obliged to deduct, collect and transfer the cash withdrawal withholding tax. As we said in the body of our report, these are the reasons for the existence of an informal economy and they should be obliged to all be tackled: High taxation level (in Macedonia, high payroll taxes) Onerous labour market regulations Red tape and bureaucracy (which often leads to corruption) Complexity and unpredictability of the tax system Reporting Requirements and Transparency All banks should be obliged to report foreign exchange transactions of more than 10,000 DM (whether in one transaction or cumulatively by the same legal entity). All registrars should be computerized: land, real estate, motor vehicles, share ownership, companies registration, tax filings, import and export related documentation (customs), VAT, permits and licences, records of flights abroad, ownership of mobile phones and so on. Thus, they should be able to find tax evasion easily (ask for sources of wealth- how did you build this house and buy a new car if you are earning 500 DM monthly according to your tax return?) The PRO should have complete access to the computers of the ZPP and to all its computerized and non-computerized records.). All the ZPP account numbers of all the firms in Macedonia should be publicly available through the Internet and in printed form. All the banks and the post office should respect and accept each other's checks. A system of informants and informant rewards should be established, including anonymous phone calls.