Red Tape Hot Box the taxing problem of vat
The principal argument that comes to my mind against this optimistic statement is that in this part of the continent we have taxes or, to be more precise, we have Value Added Tax (VAT), while across the ocean they don't. As I've been taught, taxes slow down industrial development and growth. Thus, it seems to me quite obvious that this race against the 'cowboy country' can't be won.
Nevertheless, I understand that Europe lives from VAT and it is essential to the existence of every government in the EU. Also this tax has become the main revenue for our state. Moreover, the EU expects us to adapt our VAT to the one that is common within its structures. The basic VAT rate within the EU has to be over 15 percent. That's what we will have to do with children's toys or musical instruments, which up till now have had seven percent VAT, but after applying the basic VAT they will be taxed at 22 percent. But why immediately impose 22 percent VAT if the EU allows for it to be lower? That's a good question.
Our Western neighbors, the Germans, have 16 percent VAT. It's one of lowest rates in the EU, I have to admit, but we on the other hand have one of the highest! Is that reasonable? Thus, this high rate doesn't come from the exerted pressure of Brussels but from our own government, which is unable to cut down its spending.
The same goes for the development of residential buildings. There is no law that enforces each member to tax the land which will serve as a construction site. Thus, none of the EU countries does that because they know that such a tax policy would suppress any incentive in building new residential projects. Except for Poland, that is, who have placed VAT even in this area of industry.
But the biggest problem is the gathering of taxes, which is a complicated process, and any mistakes or oversights in this matter might create possibilities of committing fraud. Moreover, the fiscal department has unlimited power in chasing the businesses they think have tried to evade paying VAT. Due to the fact that the law is unspecific as to the clerks' responsibility for committing any mistakes, many innocent entrepreneurs are forced to close down their businesses.
This tax chaos which prevails in our country has already been noticed by Brussels. Also, what has been noticed is the retention of national laws which conflict with European Community law. So far they have given us only warnings, which haven't had much effect on our legislative body. Maybe when, after becoming members, the European Court of Justice imposes finally a penalty payment on us, our government will start to comply...
Nevertheless, I understand that Europe lives from VAT and it is essential to the existence of every government in the EU. Also this tax has become the main revenue for our state. Moreover, the EU expects us to adapt our VAT to the one that is common within its structures. The basic VAT rate within the EU has to be over 15 percent. That's what we will have to do with children's toys or musical instruments, which up till now have had seven percent VAT, but after applying the basic VAT they will be taxed at 22 percent. But why immediately impose 22 percent VAT if the EU allows for it to be lower? That's a good question.
Our Western neighbors, the Germans, have 16 percent VAT. It's one of lowest rates in the EU, I have to admit, but we on the other hand have one of the highest! Is that reasonable? Thus, this high rate doesn't come from the exerted pressure of Brussels but from our own government, which is unable to cut down its spending.
The same goes for the development of residential buildings. There is no law that enforces each member to tax the land which will serve as a construction site. Thus, none of the EU countries does that because they know that such a tax policy would suppress any incentive in building new residential projects. Except for Poland, that is, who have placed VAT even in this area of industry.
But the biggest problem is the gathering of taxes, which is a complicated process, and any mistakes or oversights in this matter might create possibilities of committing fraud. Moreover, the fiscal department has unlimited power in chasing the businesses they think have tried to evade paying VAT. Due to the fact that the law is unspecific as to the clerks' responsibility for committing any mistakes, many innocent entrepreneurs are forced to close down their businesses.
This tax chaos which prevails in our country has already been noticed by Brussels. Also, what has been noticed is the retention of national laws which conflict with European Community law. So far they have given us only warnings, which haven't had much effect on our legislative body. Maybe when, after becoming members, the European Court of Justice imposes finally a penalty payment on us, our government will start to comply...
