Croatian economy: desperate times equal desperate measures?

Croatia: Tax debtors’ pillar of shame Photo: novilist.hr

He has done it!

Croatia’s finance minister Slavko Linic has erected the  “Pillar of Shame”, naming individuals and companies that, in terms of average wage, owe tax – big time! Some 130,000 names are on the list published today by Croatia’s taxation administration office 

The published names include tax debtors in categories from/and above 100,000 HRK (13,330 EUR) for physical entities carrying on business, 300,000 HRK ( 39,990 EUR) for legal entities  and 15,000 HRK (2,000 EUR) for all other taxpayers (citizens). The format of the list on the website is such that searches are enabled via all three above categories of tax-debt amounts in every county of Croatia. A job made very easy for local snooping, no doubt.

So, anyone wanting to know whether his/her neighbour or the shop down the street hasn’t been paying taxes this is the place to visit.

According to Vecernji List portal the first 100 of tax debtor’s from Linic’s “Pillar of Shame” owe individually more that 20 Million HRK (2.7 Million EUR), while 3,000 of the legal entities owe about 15 Billion HRK (2 Billion EUR).

I expect the website will crash several times for overuse. Names of debtors are already being published, talked about and, undoubtedly, are likely to cause quite a stir and bitterness among people. Especially those who cannot receive a decent medical treatment in public hospitals (funded from taxes) and see a tax-debtor cruising about in a flashy car or prancing around the town square in top designer gear.

Whether this desperate move by Croatia’s finance minister will materialise in any significant tax revenue is yet to be seen. One assumes that all tax debtors susceptible to “scare tactics” had paid their debts soon after the minister announced the “pillar of shame” some months ago.

The possible and dreaded consequences of such “pillar of shame” include that the whole exercise becomes the butt of town square jokes and the individual taxpayer responsibility will sink deeper and deeper into blatant irresponsibility. Furthermore, the mere inclusion into the “pillar of shame” could easily provide an easy way out of business for many businesses – declare bankruptcy under public shame pressures, loss of jobs. This is particularly relevant given that Linic has said in recent days that company tax debts could lead to directors losing their private property to the debts.

Whether the old proverb “you can lead a horse to water, but you can’t make it drink” will be disproved by this desperate measure to bring invigorating revenue, and taxpayer behaviour modification, into a desperate economy is a matter worth following.  However, it just may be a politically valuable  PR exercise for the struggling leftist government and, that’s all. After all, they would want to be seen as “doing everything under the sun” to help the ailing economy make a U-turn into positive figures. But, even if the amounts owed in tax look high, the fact is that it’s barely enough for a very small bandaid on Bigfoot.

If Linic and Croatia’s government were more serious about fixing tax avoidance then, certainly, we would be seeing effective procedures and measures in place that would consistently police tax debts with ruthlessness. The kind of unforgiving monitoring that occurs in developed democratic countries. Human defence mechanisms can go “any which way” in the face of public shame exposure. Risky business, indeed. But, all things said – I do wish the “Pillar of Shame” good success. Ina Vukic, Prof. (Zgb); B.A.,M.A.Ps. (Syd)

Comments

  1. Michael Silovic says:

    I have an issue with the pillar of shame as its called.While I agree that the taxes need to be paid these type of issues should be handled in a court of law through fines and seizures of property and monies and not through public humiliation.Once you start naming people in public for shame for one thing then it leads to other so called pillar of shame that not only affects the individual person but entire families including the children of those families.

    Like

    • Totally agree Michael. Public shaming is no way to create a lasting behaviour of proper respect and responsibility towards paying taxes. There are measures that are in place in the West that take care of that. The Croatian government, prime minister, is saying these days that it’s not a shame to be on the public list etc… rubbish. It is a shame but the people themselves on the list are likely to play it down and blame someone else. They’re already blaming the former government for allowing the debts to get high, so is the leftist government. All politics. None of them are saying that such appalling record towards responsibility to state (by paying dues) is what was practiced in communist Yugoslavia…debt, debt…to the choking point.

      Like

Trackbacks

  1. […] future looks at how Croatia’s Finance Minister Slavko Linic has started to shame the country’s tax evaders by publishing the names of 130,000 businesses and individuals. The Croatian government hopes that […]

    Like

  2. […] houses belonging to Croatian Serbs illegally and that his name was on the recently published “Pillar of Shame” for owing some 300,000 HRK in taxes – as such, SNC maintains, Rodic has no place in being […]

    Like

  3. […] minister of finances, Slavko Linic, published in July the “Pillar of Shame”, naming those owing the State coughers significant tax debts only around 7.4 Million EURO of […]

    Like

  4. […] Linic has not learned it seems from his failed step where he published the names of tax evaders – the Pillar of Shame – in order to drive significantly more taxpayers into compliance with tax […]

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Disclaimer, Terms and Conditions:

All content on “Croatia, the War, and the Future” blog is for informational purposes only. “Croatia, the War, and the Future” blog is not responsible for and expressly disclaims all liability for the interpretations and subsequent reactions of visitors or commenters either to this site or its associate Twitter account, @IVukic or its Facebook account. Comments on this website are the sole responsibility of their writers and the writer will take full responsibility, liability, and blame for any libel or litigation that results from something written in or as a direct result of something written in a comment. The nature of information provided on this website may be transitional and, therefore, accuracy, completeness, veracity, honesty, exactitude, factuality and politeness of comments are not guaranteed. This blog may contain hypertext links to other websites or webpages. “Croatia, the War, and the Future” does not control or guarantee the accuracy, relevance, timeliness or completeness of information on any other website or webpage. We do not endorse or accept any responsibility for any views expressed or products or services offered on outside sites, or the organisations sponsoring those sites, or the safety of linking to those sites. Comment Policy: Everyone is welcome and encouraged to voice their opinion regardless of identity, politics, ideology, religion or agreement with the subject in posts or other commentators. Personal or other criticism is acceptable as long as it is justified by facts, arguments or discussions of key issues. Comments that include profanity, offensive language and insults will be moderated.
%d bloggers like this: