The recent announcement for the possible introduction of progressive taxation on personal income took the private sector by surprise and raised a lot of concerns. Both domestic companies and foreign investors are worried about the impact this measure will have on the economy, such as increased tax evasion and expanded grey economy, capital outflow and reduced investments, increased brain drain, and disincentivized skilled staff.
Moreover, such isolated measures will not achieve the desired goal of filling the state coffers and achieving social equality. What is needed is a comprehensive tax reform that would consider all sources of income and focus on collecting existing taxes, while carefully analyzing the possible ripple effects and consequences to the economy.
AmCham Macedonia, in partnership with MASIT – the IT Chamber and Macedonia2025, is launching an initiative to create social dialogue between the private, the Government, and the civil sector in order to design reforms that would both solve social issues and allow the economy to grow.
As a first step in the initiative, below is the position statement of the three organizations on the impact progressive taxation would have on the economy. The statement is a result of consultations with the private sector, surveys, and analyses and represents the voice of business in Macedonia. The position statement and all supporting research was submitted to the Ministry of Finance and will be delivered to all relevant public institutions as well.