Angelovska: Progressive tax is not scrapped, focused on designing a fair, efficient and comprehensive solution

Progressive tax is not scrapped, but put on hold. Efforts in the coming period will be focused on designing an optimal solution, a fair, efficient and comprehensive one, North Macedonia’s Finance Minister Nina Angelovska told the public broadcasting service.

The minister of finance added that the government’s decision on progressive taxation demonstrates sobriety and decision-making based on analyses, findings and studied effects.

She pointed out that a fair tax system required intensive work and efforts in reducing grey economy, as well as increasing people’s trust in institutions.

“The main purpose of progressive taxation was to reduce inequality, i.e. to redistribute income. The data and the analysis are indeed six-month assessment results, but truth be told, new technologies – the new tax collection system of the Public Revenue Office that collects detailed data enables us to expeditiously see the effects, reach decisions and undertake corrective action before it’s too late. The analysis showed that an insignificant redistribution was made, but more importantly – a fictitious one,” Angelovska said.

Efforts in the coming period, she continued, will be focused on designing an optimal solution, involving all stakeholders, as well as mechanisms to reduce grey economy as one of the important preconditions for the introduction of such a complex tax reform. In addition, she said, households, not individuals, will be put at the center of debate.

Regarding the income tax on capital gains and deposits, Angelovska said that the new solutions will reduce administrative burdens and create a systematic way of efficient collection.