VLADIMIR NOVAKOVIĆ, Chairman of NALED’s Managing Board and General Manager of Apatin Brewery: Old Obstacles Disappearing, New Ones Popping up

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Although the state authorities have managed to remove many obstacles to better functioning of companies and easier life for the citizens, new edition of the Grey book shows that there is still a long way to go.

What are the key recommendations for the Grey Book in 2019? Which reforms have to be expedited?

— The 11th edition of the Grey Book brings 100 recommendations for reduction of administrative and (para)fiscal burdens, which were devised based on the experience of citizens and businesses in their direct contact with the state authorities. 31 recommendations are brand new, which suggests that we are not sufficiently effective in dealing with bureaucracy and that new laws continue to impose complicated procedures. New obstacles have popped up also because of the changed market circumstances, or due to technological progress or examples from other countries
that shed the light on the extent of bureaucratization of our society. In 2018 the ministries implemented 12 recommendations in whole or in part, which is 30% more. However, we believe that the pace of adoption of recommendations should be much faster considering that, in addition to describing the problem, the Grey Book also offers concrete solutions which makes it a kind of a guideline and work plan for institutions on how to improve the business environment.

Which obstacles for doing business have you targeted this year?

— We have singled out 10 priority recommendations that we are nominating to be included in the Government of Serbia’s agenda, primarily in the field of digitization. For the first time ever in the Grey Book we have an initiative for establishment of an electronic public procurement system. Also, we propose that, in 2019, we should introduce an e-agri system, for the electronic registration of agricultural holdings and the incentive allocation. In terms of tax regulations, we recommend the establishment of electronic delivery of tax certificates, as well as the digitization of tax decisions for small businesses that pay flat tax rate. The recommendation for the establishment of the public register of fees and charges, that was also one of the top 10 initiatives last year, as well as the development of e-archiving remain priorities in the new edition of the Grey Book. However, the request for further reduction of salary tax and contributions remains the ultimate priority for businesses. With regard to brand new recommendations, apart from e-procurement, we would also like to mention the proposals for abolition of paper payment orders, enabling automatic change of residence in documents, the optimization of the procedure for changing ownership of vehicles, the introduction of the electronic invoice delivery system, etc.

How much did the development of e-services and e-government help companies with reducing administration and extra costs?

— Several e-government services have been introduced in the past three years, quickly proving their practical value and thus being readily accepted. We are proud that NALED took part in their development. The first such service is the system of electronic issuance of building permits through which over 200,000 building permit applications have been submitted in the period of three years. Today, this procedure is completely transparent and has improved the efficiency of institutions with over 90% applications processed within the legal deadlines. Now, it takes only six days to obtain a building permit. E-Counter has replaced six visits to relevant authorities with a single visit to a public notary, now serving as a one-stop shop to submit your application and registration document. In just six months, over 130,000 applications have been submitted via e-cadastre, i.e. 40% of all procedures handled by the cadastre office. Also, the average time required to process the application is shortened from 25 to 5 days. The portal for electronic registration of seasonal workers was launched in January this year, and during its first three weeks, it has received over 3,000 applications for hiring seasonal workers in agriculture. For instance, this is the total number of applications that we had for the entire 2017. NALED has also implemented training for over 5,000 civil servants and other system users. We are proud to say that we have also secured donations for e-permits and the system for electronic registration of seasonal workers from the german development cooperation organization (GIZ) that were used towards development of the needed software. By doing so, we have saved a lot of taxpayers’ money.

Last year, when you summed up the decade-long results since the launch of the Grey Book, we saw that an impressive number of initiatives were accepted, but also that, in some cases, public administration proved to be extremely stubborn. Is there any chance that one of these perennial initiatives will be implemented?

— There are several reasons why some of the initiatives are published time after time in the Grey Book, and we are mainly talking about systemic reforms or reforms that require the coordination of several institutions. For example, reduction in taxes and contributions requires an extensive analysis of the possible effects on budget revenues, business conditions, the impact on the grey economy and employment. Implementing such reform is not an easy fet. Another example is the reform of non-tax charges, which began in 2012, following the abolition of 138 fees and charges at NALED’s initiative. However, this reform was quickly abandoned. Last year was marked by the adoption of the Law on Fees, which does represent a shift in transparency. However, contrary to our expectations, some new fees were introduced while some old ones still remain in place, mainly those resembling taxes by nature and the so-called double fees. Also, our key requirement for the establishment of the public register of fees and charges was not accepted.

What success from 2018, under the framework of the fouryear Public Private Dialogue for Growth project, would you like to single out?

— Public Private Dialogue for Growth project is an initiative that we have launched with USAID with the aim of developing sustainable cooperation and communication between the state, businesses and civil society, as well as the development of the capacities of all three sides for dialogue. Public-private dialogue has not been established in our country as a regular practice as yet, and 60% of the laws are passed without an adequate public debate. In 2018, we selected three associations with which we will work on advocating reforms in the segments in which their members operate. They are the Association for Entrepreneurship Development, Agri-cluster of Serbia and the Association of Beekeeping Organizations of Serbia. In agreement with them, we would like to nominate improvement of
business conditions for small businesses that pay flat tax rate, boosting organic food production and preventing the poisoning of bees to be included in the Government’s agenda. During September and December, we organized two campaigns – “The Month of Flat Tax Payers” and “The Organic Food Month” – which attracted attention from both the public and institutions. We have already reached an agreement with the line ministries about next steps. In the first half of 2019, we will launch a beekeeping campaign, and in the next few years, we plan to open three new topics with three other organizations.

How would you assess the overall cooperation with public administration?

— Communication and cooperation have been improving in the last five years since we, together with the Government of Serbia, agreed to establish two joint bodies comprising representatives of line ministries and businesses from the segments that need urgent reforms. They have achieved excellent results. These are the Expert Group for countering grey economy and the Joint Group for the improvement of Serbia’s ranking on the Doing Business List. By working together, we devised the National Programme for Countering Grey Economy, which contributed to the fact that, in the last three years, the scope of grey economy among registered businesses has been reduced from 21.2% to 15.4% of GDP, as well as Serbia improving its rank on the World Bank’s Doing Business List from the 91st to the 43rd place. We believe that such bodies are needed in other priority areas such as agriculture and healthcare. On the other hand, we expect that certain institutions will become much more active in reform activities and implementation of the recommendations stipulated in the Grey Book, and by this, we primarily mean the ministries of economy and health.

How much do citizens and companies use the opportunity to launch initiatives for policy change together with you?

— Businesses are very interested in this. Last year alone, we surpassed the number of 300 members and for years now, we have been the biggest business association in Serbia. Business people are particularly interested in joining thematic alliances, in which they actively contribute to drafting and implementing reforms in specific areas. Thus, we have formed alliances for fair competition, e-government, property and spatial planning, healthcare, agriculture and food. Membership in these alliances is constantly increasing because they have proven to be an effective mechanism. We are in the process of forming yet another alliance. Citizens and companies are very interested in cooperation. Last year, in addition to the “The Month of Flat Tax Payers” and “The Organic Food Month” campaigns, we also launched the campaign called “Ask When” during which we singled out bureaucratic procedures that need to be digitized. We had an excellent response in all three campaigns.

Every year you give out the Top Reformer Award. Is choosing a winner a difficult job considering the number and the quality of nominees?

— The Top Reformer of the Year Award is given to prominent representatives of the public administration – ministers and their associates, state and provincial secretaries, heads of regulatory bodies and agencies, mayors and municipal presidents, who in the past year, in cooperation with NALED, made a concrete contribution to improving the business environment. We had nine nominees this year, with two standing out – the reform of cadastre registration and the engagement of seasonal workers. Unlike the years when competition was weak due to a lack of
substantial reforms, this year, the selection of General Director of Republic Geodetic Authority was an easy choice, as this was a systemic reform that influenced a large number of businesses and citizens, strongly demonstrating its value during the six months of implementation.

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