Macedonia’s government is about to introduce a progressive tax system in a bid to address its status as the worst country in Europe for income inequality.
Finance Minister Dragan Tevdovski indicated that income tax would rise by 8% to a total of 18% for salaries above MKD90,000 (US$1,658) per month from next year, replacing a flat personal income tax rate of 10% that had been in place for the last decade.
“That amount sets apart the most affluent one percent in Macedonia. It was not fair that those who received the most were able to pay the least,” Tevdovski said.
According to Nezavisen, Macedonia is ranked the most unequal country in Europe in terms of income distribution.
But Tevdovski pointed out that the government had promised to introduce fairer taxation in its election campaign. “We believe in solidarity, and it’s only fair that people who have more help people who have less," he said. "Only by helping each other can we build a society that provides everyone with equal rights and opportunities.”
Tevdovski also indicated that the world’s most successful economies rely on fair taxation, especially in Europe and the US.
Other measures in the draft legislation include increasing the threshold of income that is subject to tax from MKD 7,500 (US$139) to MKD8,000 (US$148) in order to benefit citizens on lower incomes. A national social pension will also be introduced and pay out MKD5,800 (US$107) per month for any citizen who is over 65, has lived in the country for more than 15 years and worked there for more than one day.
The new system is expected to contribute E25 million (US$28.5 million) towards the fight against poverty, which includes a 300% increase in welfare payments and the introduction of financial assistance for 60,000 children.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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Macedonia’s government is about to introduce a progressive tax system in a bid to address its status as the worst country in Europe for income inequality.
Finance Minister Dragan Tevdovski indicated that income tax would rise by 8% to a total of 18% for salaries above MKD90,000 (US$1,658) per month from next year, replacing a flat personal income tax rate of 10% that had been in place for the last decade.
“That amount sets apart the most affluent one percent in Macedonia. It was not fair that those who received the most were able to pay the least,” Tevdovski said.
According to Nezavisen, Macedonia is ranked the most unequal country in Europe in terms of income distribution.
But Tevdovski pointed out that the government had promised to introduce fairer taxation in its election campaign. “We believe in solidarity, and it’s only fair that people who have more help people who have less," he said. "Only by helping each other can we build a society that provides everyone with equal rights and opportunities.”
Tevdovski also indicated that the world’s most successful economies rely on fair taxation, especially in Europe and the US.
Other measures in the draft legislation include increasing the threshold of income that is subject to tax from MKD 7,500 (US$139) to MKD8,000 (US$148) in order to benefit citizens on lower incomes. A national social pension will also be introduced and pay out MKD5,800 (US$107) per month for any citizen who is over 65, has lived in the country for more than 15 years and worked there for more than one day.
The new system is expected to contribute E25 million (US$28.5 million) towards the fight against poverty, which includes a 300% increase in welfare payments and the introduction of financial assistance for 60,000 children.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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Minding your manners in Central Europe
How CEE payroll managers are getting on top of their admin burdens
