UNITAS, the long-awaited system that will bring the collection of taxes, customs duties and mandatory payroll levies under one state administrative body has made a recent leap forward. Slovakia’s parliament adopted a trio of laws in mid September, prepared by the Finance Ministry, that authorise necessary steps in the implementation of UNITAS. The overall idea is to make this aspect of public administration less bureaucratic and more efficient. UNITAS was unveiled during the government of Robert Fico and Prime Minister Iveta Radičová’s government continues to move its implementation forward.
“The aim of this reform is to change tax and customs administration so that it is more effective in terms of reducing its own costs, more effective from the viewpoint of collecting state revenues, and simultaneously is pro-client oriented in processes that remove excess bureaucracy,” the Finance Ministry wrote in its proposed changes to the law on tax administration, one of the three tax-related pieces of legislation adopted by parliament on September 14.
The two other pieces of legislation deal with the state bodies responsible for collection of taxes, fees and customs and the law governing state financial administration.
The Fico government adopted the original UNITAS concept in May 2008.
“One of the Finance Ministry’s priorities is continuing reform of tax administration along with involvement of customs administration with the vision of unifying processes for collection of taxes, customs duties and payroll levies into one institution,” the Finance Ministry wrote in its March 2010 concept paper describing what it plans to accomplish. The Finance Ministry is responsible for coordinating the various aspects of UNITAS.
Two phases
UNITAS has two phases. During the initial phase, UNITAS I, tax and customs administration will be reformed. The goal of UNITAS II is to then unify collection of taxes and customs duties with collection of payments made by companies and individuals for health insurance and mandatory levies going to Slovakia’s social insurance company, Sociálna Poisťovňa.
Two of the laws adopted on September 14 are related to the first phase. The changes in the law on state administrative bodies authorises the combining the institutions collecting taxes, fees and customs duties at the directorate level by creating a newly-designated Financial Directorate. Separate tax and customs offices will be retained for some time to prevent an abrupt change in current processes that could negatively impact the functionality of financial administration or reduce access by citizens and companies. Unification of tax and customs offices will be undertaken in 2013.
The September 14 revision to the law on the tax code is also linked with UNITAS phase I and it amends regulations pertaining to specific kinds of taxes and organisational structure. It authorises the finance minister to establish the internal organisational structure of tax offices as of the start of 2012, including branches tax offices and their contact points.
The third piece of legislation deals with financial administration and under it the second phase of reform with the goal of unifying collection of taxes, customs and insurance payments will be pursued.
“By merging the existing tax and customs offices, new financial offices will be created that will carry out comprehensive administration of taxes and customs,” the Finance Ministry stated in its materials accompanying the legislation. “This will wrap up institutional preparation for joint collection of insurance payments as of January 2013.”
The merger of the tax and customs administrations is planned for January 1, 2013. Prior to this, the tax administration must implement reforms by early 2012 so that the other government offices will have time to prepare for the subsequent merger.
