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Finance Ministry considering a sweeping “Emergency Tax” to compensate for poor economic performance in Macedonia

The SDSM/DUI led coalition has increased the national debt of Macedonia by a staggering 1.63 billion euros between the end of 2019 and now.

As a response to a potential financial crisis, the Ministry of Finance is considering introducing an “emergency tax” which will be factored in automatically with every purchase in the supermarket, gas station, goods and services, events and so on.

Academic Taki Fiti recently announced at an economic conference that the Government should increase personal income tax, property tax and introduce a new environmental tax.

His call for higher taxation is a reflection of the poor management of the corona pandemic which contributed to a wave of layoffs across multiple industries and brought the economy to a near halt.

If the move is adopted, disposable income will decrease year on year and companies will have to raise the price of their products, making them less competitive to export markets.

In addition to the potential tax increase and reintroduction of progressive taxation, the national electric power regulator has also announced an increase in the cost of electricity, however, this is to counter challenges posed by costs, supply and demand.

The cost of the electric utility bill is the third highest monthly expense after meat and whet products for Macedonian households – taking out roughly 7,3% from the household income.

Meanwhile, Macedonia has a huge grey economy that takes up 37% of all financial transactions, which the Government hasn’t been able to address.

Servicing Macedonian debt and the interest on its Eurobonds requires more than 10 million euros per year.

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