SLOVAKS will have to wait for unified collection of taxes, custom duties and payroll levies longer that originally projected. The Finance Ministry has re-evaluated the project known as UNITAS and declared that unified collection is realistic only from the beginning 2016 at the earliest. Originally the launch of UNITAS was projected for the beginning of 2013. The ministry ascribes the blame for the postponement to the previous cabinet of Iveta Radičová and the almost complete collapse of the financial administration earlier this year because of the non-functional information system. It is not certain whether the new system will be implemented in its planned form at all.
“[There are indications] that this unification is not necessarily the best solution,” Peter Pellegrini, the state secretary of the Finance Ministry said in early August, as quoted by the SITA newswire.
The halt in the UNITAS project means that the new information system of the Financial Administration of the Slovak Republic will be introduced one year later, in 2014. The ministry has also halted merging tax and customs duties offices.
Referring to the malfunctioning IT tax system earlier this year, Pellegrini explained that the Finance Ministry refuses to do any other experiments in the financial administration. Thus the financial administration should launch the new portal with services for clients during the first half of 2014 while the currently valid RDS system as well as the planned new information system should work concurrently during the second half of the year. The operation of the old system, in the event that the new system works flawlessly, should terminate by the beginning of 2015.
The ministry’s key task is to get the financial administration into a normal regime and continue with the UNITAS project, according to Pellegrini.
The financial administration will not continue developing the KONS information system, which should have launched earlier this year, according to its president František Imrecze.
The KONS system was supposed to work as a temporary solution beginning on February 1 to bridge the gap between the old RDS software and new software prepared by IBM for UNITAS. But employees of the tax offices began complaining in early February that the KONS system was not functioning properly and the old system was restored. The failed attempt to launch a new system significantly complicated the work of tax offices, postponed VAT refunds and resulted in complications for tax payers too.
“The most negative thing was that there emerged opportunities for tax evasion during the time when, due to the consolidation of public finances, we had to save every euro,” the Finance Ministry wrote in its press release. “Equally, the number and amount of unrecoverable due taxes has increased.”
UNITAS is a long-awaited system that will bring the collection of taxes, customs duties and mandatory payroll levies under one state administrative body. The overall idea of UNITAS is to make this aspect of public administration less bureaucratic and more efficient. UNITAS was unveiled during the first reign of Robert Fico, and Iveta Radičová’s government continued to move its implementation forward. Last September Slovakia’s parliament adopted a trio of laws authorising necessary steps in the implementation of UNITAS.
“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 through processes that remove excess bureaucracy,” the Finance Ministry led by Ivan Mikloš 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, 2011.
The two other pieces of legislation deal with the state bodies responsible for the collection of taxes, fees and customs and the law governing the state financial administration.
The Fico government adopted the original UNITAS concept in May 2008.
UNITAS has two phases. During the initial phase, UNITAS I, tax and customs administration is to be reformed. The goal of UNITAS II is to then unify the collection of taxes and customs duties with the collection of payments made by companies and individuals for health insurance and mandatory levies going to Slovakia’s social insurance company, Sociálna Poisťovňa.