According to data from the Agency for Business Registers (APR), there are currently 137,668 companies and 351,003 entrepreneurs operating in Serbia. The number of entrepreneurs continues to grow each year, reflecting a rising trend in self-employment. Despite this, many still face significant bureaucratic and administrative challenges.
One of the main issues is the outdated tax and contribution payment system. Unlike employees in companies, whose taxes and contributions are paid through a single unified account, entrepreneurs—especially lump-sum taxpayers and those who don’t pay personal earnings—must make four separate payments each month. These include payments for income tax, pension contributions (PIO), health insurance, and unemployment insurance. This results in more than nine million individual payments annually, according to Marija Suzić, an advisor for innovation and entrepreneurship at NALED.
This system not only increases administrative burdens but also leads to frequent payment errors. If funds are mistakenly paid to the wrong account, entrepreneurs must submit a request for transfer, which clogs the system. NALED reports that one in four entrepreneurs without personal income submits such a request, compared to only one in a hundred among those with unified payments.
Another significant problem is the recording of length of service. Even when taxes and contributions are paid regularly, the Pension and Disability Insurance Fund does not automatically record seniority. Entrepreneurs must submit a request for this to happen, but many are unaware of the requirement, potentially impacting their ability to receive a pension later.
To address these issues, NALED has long advocated for a unified payment system for all entrepreneurs, modeled on the system currently used by those who pay personal earnings. This would allow a single monthly payment to one account, which would then be automatically distributed to the appropriate funds. The recommendation is part of NALED’s Gray Book, specifically recommendation 1.3 under the Ministry of Finance.
The proposed reform requires only minor regulatory adjustments, including changes to the Rulebook on public revenue payments and establishing a protocol between the Tax and Treasury Administrations. The reform could reduce annual payment transactions by 6.9 million and eliminate the need for fund rebooking. Additionally, integration between the Tax Administration and the PIO Fund would ensure automatic recording of contributions and seniority, easing the administrative load on entrepreneurs and improving pension security.
