The government on Thursday adopted a Fiscal Cash Register Bill, with the aim of facilitating as of 1 January better supervision over cash transactions by the Ministry of Finance. The purpose of the proposed Act is to create conditions for supervision of cash transactions (issuance of invoices, sale of goods and services for cash), decrease possibilities of tax evasion and generally achieve a higher level of business IT technology particularly in catering and tourism where Value Added Tax (VAT) will then be reduced to 10%.
The introduction of fiscal cash registers will mean they are networked to the tax department, thereby putting an end to tax evasion of all those who deal with cash payments.
Data seems to indicate that only 15% of overall turnover is due to cash transactions and daily takings are so low that no-one could possibly survive on them, Finance Minister Slavko Linic said.
The new act will not introduce any additional costs to businesses as existing cash registers will just install new software solutions connecting them to the tax department.
Those businesses that can be controlled via other methods will be exempted from the new act.
The new act will also introduce a new cash transaction limit of 5,000 kuna.
The Ministry estimates that fiscalisation will bring in an extra billion kuna, setback by 13 mln kuna the government will have to pay out in the first year to set up the new system and a further 15 mln in the following two years.
The measures should make the entire system more transparent and reduce the grey market and it is being introduced in parallel with the introduction of lower VAT in the catering and tourism sector which will relieve their expenditure for VAT by about 60%, First Prime Minister and Economy Minister Radimir Cacic said.
Prime Minister Zoran Milanovic pointed out that the new measures will not up tax burdens. We do not want to discourage businessmen, he said but underlined that taxes must be paid.
The government also discussed a regulation on the internal organisation of the finance ministry, which envisages the establishment of a department for large tax payers, a strategy and development department and a department to provide services to tax payers concerning the interpretation of legal acts.
