Popovski on “freezing” fair tax: Such measures are taken only by far-right governments

University Professor Nikola Popovski, former senior SDSM official, views the government’s move to “freeze” progressive taxation as wrong. He says such measures are only taken by far-right governments, although the headquarters on Ilinden Street, according to him, was under pressure in this case from just a small group of people burdened with taxation.
Popovski says progressive tax is, in fact, a civilized tax that is present in most countries in our neighborhood, primarily in EU member states.
– The goal that Macedonia strives for is the EU. We do not strive for those two or three neighboring countries that are like us, but strive for the EU. Second, progressive taxation is fair, as it relatively taxes those who earn more – explains the former minister of finance.
In this case, according to him, SDSM makes a big mistake by returning the introduced, or more precisely semi-introduced progressive tax – for personal income tax only, not for profit and only for one rate and one for capital income statement.
– This way, SDSM actually takes measures that are taken only by far-right governments. Let me remind you, a flat tax at a proportionate rate for both the rich and the poor, and at the same time a very low rate, does not provide adequate funding. That is why, when introducing such a tax policy, VMRO-DPMNE immediately began to increase its budget deficit and public debt. Because they cannot finance their needs with taxes, they finance them with borrowing. The current flat tax refund is a wrong policy, which I disagree with, but I suppose those who lead the policy have some arguments that are acceptable to them – says Popovski.
He adds that he hopes the SDSM government is ready to bear the consequences of taking such a step.
-The pressure against progressive tax was from a very small group of people in Macedonia. But they were very loud. These are mostly the people who are damaged by taxation the most. Although SDSM has repeatedly stated that it represents another category of people in the elections, it has once again fallen into the quicksand of the owners and their way of thinking. They pleased them and now they are probably ready to bear the consequences, whatever they may be of this policy,” Popovski said in a statement for Nezavisen Vesnik/Independent daily newspaper.
He was the last SDSM minister before leaving the opposition party in 2006. The following year, the government of Nikola Gruevski, the university professor that served as finance minister at the time Trajko Slaveski introduced flat tax and reduced the income tax rate to 10 percent, down from 15, 18 and 24 percent.
Since the early parliamentary elections in 2011, when SDSM was still headed by Branko Crvenkovski, progressive tax returns have been one of the key promises in the Social Democrats’ program of action, besides the point of return for the middle class. Since the beginning of this year, however, after several delays and reassessments, SDSM has finally established progressive taxation – in this case a higher rate of 18 percent for the portion of income over 90 thousand denars. This has caused dissatisfaction mainly in the business sector.
Former Finance Minister Dragan Tevdovski was credited with introducing progressive tax. He is one of the main creators of the SDSM program for the 2016 elections. Some experts and political analysts described the program as “leftist”. However, the government of Zoran Zaev has, over the past two and a half years, implemented much of the promises of the “For a Life in Macedonia” platform, especially in terms of reducing social differences in society and greater protection of socially vulnerable groups.
Prime Minister Zoran Zaev, on the other hand, has repeatedly stated that his government is left-wing and that it is pursuing policies in the spirit of the social-democratic idea in Europe.
“We are leftists and we believe in fair taxation,” Zaev said on one occasion after the government began considering options for abandoning flat tax.
However, the progressive tax introduced by the SDSM government did not withstand a single year. This weekend, new Finance Minister Nina Angelovska announced that progressive tax package measures would be frozen for the next three years, with their application being postponed until January 1, 2023. Her explanation was that the results of the analysis showed that progressive taxation had a negligible effect on improving inequality, and that some taxpayers decided to transfer some of their income to others in order not to exceed the threshold.
Angelovska’s predecessor, Dragan Tevdovski, who was the only dismissed minister several months ago during a cabinet reshuffle (others resigned) told his fellow MPs to consider before voting whether they would stay Social Democrats if the vote for a “freeze” on the progressive tax.
– SDSM MPs, before voting on this, should think whether they are for deleting Social Democratic of SDSM’s name. Especially by people who have nothing to do with SDSM – Tevdovski wrote on Facebook.

(AMM)