Serbian President Aleksandar Vučić has a seemingly brilliant idea how to make life easier for low-income workers. During his unofficial campaign in which he is running for prime minister of Serbia, he stated that taxes and contributions would be reduced so that the minimum wage could be increased.
"We cannot destroy the domestic economy by increasing the minimum wage that employers would not be able to pay, so the state will accept that increase at its own expense," Vučić said.
However, thousands of employers in Serbia do not pay seniority contributions to their workers at all, so experts advise them to check it and if something is wrong, report it to the company. This is where the problem arises, because the company needs to be reported to state inspections, and the employees are with the same state.
"There is not a single precise, publicly available data on the exact number of all employers in Serbia who do not pay contributions, and this affects tens of thousands workersRanka Savić, president of the Association of Free and Independent Trade Unions of Serbia, told Vreme. "Nevertheless, it is known that the biggest problem is with the dedicated industry. For example, 'Zastava Arms' did not pay taxes and contributions to its workers who practically work for the state for five years. Public utility companies also have huge debts for these levies."
Every employee in Serbia has the right to check the contributions that have been paid for him. In this way, they can find out whether their employer regularly fulfills the legal obligations towards the state.
Photo: Tanjug/Cabinet of the Mayor of the City of Novi SadCity cleanliness workers in Novi Sad
That's not Vučić's idea.
Mario Reljanović, professor of labor law, tells "Vreme" that the reduction of taxes and contributions was not Vučić's idea, but that the authorities before him did it. However, in this way, he says, it actually only helps the employer, not the employee.
"All these reductions go into the employer's pocket because the gross salary is reduced. Thus, the state practically gives subsidies to companies, and the workers remain on the same," says Reljanović.
Serbia is one of only a few countries in Europe that do not have progressive income taxes, which means that the state takes much less tax from the wages of those who earn less, while it takes more from the richer ones.
"We are one of the few in Europe that have linear taxes, so we get a situation where, when we look at the salary structure, the worker who receives the minimum wage is burdened more than the one with a salary of 300.000 dinars," explains Reljanović. "There are much more elegant systems, in which people with low wages would be left with more, those with average wages the same, and a little less for the richest."
Instructions for checking seniority
- Individuals can review data on calculated and paid contributions exclusively for themselves. Insight into other people's data from the registry is not allowed, because the system is designed to protect the privacy of each insured.
- Central Register of Compulsory Social Insurance (CROSSO) is a key tool for all employees in Serbia. From January 15, 2016, citizens can access this portal and check the status of their contributions. The portal provides a detailed overview based on individual tax returns that employers submit to the Tax Administration.
- Za access portal, you need to visit the official website of the Central Registry. Users register using their JMBG and personal information. After successful registration, the system generates a username and password. The whole process takes only a few minutes.
Photo: UnsplashWork is often unpaid work, whether through salary or taxes and contributions, Photo: Pixabay
Consequences of unpaid contributions on future pension
Regular checking of the situation in the registry helps to detect irregularities in time. In this way, the insured can react in a timely manner and protect his rights before retirement.
Monitoring the payment of contributions directly affects the pension period and the amount of the future pension. Every month without paid contributions means a shorter service and a smaller pension. According to Article 69 of the Law, the Tax Administration is responsible for controlling the calculation and payment of contributions.
Employees should not rely on institutions alone — personal verification is key.
Inaccurate or incomplete data can seriously jeopardize the realization of rights from pension insurance - the total pensionable service recognized when calculating the pension is reduced, the calculated pension can be significantly lower than expected, the employee can lose the right to disability or family pension, and the process of realizing the rights becomes longer and more complicated.
The state turns a blind eye to its failures, but pursues private individuals
According to Serbian law, an employer, state or private, cannot pay wages to an employee if he has not paid taxes and contributions.
"The state is mostly to blame because it turns a blind eye to the debts of state-owned companies, and if a private person doesn't pay, they immediately send an inspection," explains Savić.
What happens in state-owned enterprises, or those that are close to the state, she adds, is that some internal agreement is made to contribute to the payment of everyone who retires in order to be able to exercise the right to it. An additional problem is that in a number of companies, including state ones, contributions are paid on the minimum wage, even though the workers receive a higher salary.
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