Tax authority fines private media company for violating public sector regulations

August 15, 2018

Niš-based Južne vesti [Southern news], one of the most important local media outlets in Serbia, must pay a fine of more than a million dinars, even though tax inspectors have confirmed following six months of controls that the Južne vesti has not committed any acts of financial misconduct in its operations since it was established in 2010.

The fine, however, has been determined due to the employment status of Editor-in-chief Predrag Blagojevic. Referring to the nomenclature of workplaces in the public sector, tax inspectors found that Blagojević had not been granted permanent employment status within Južne vesti, which is a private company.

The Tax Administration calculated that Južne vesti must pay taxes and contributions to the Editor-in-Chief dating back to this media company’s establishment in 2010, which – with accrued interest – represents a figure of a million dinars. The Ministry of Finance, which includes the Tax Administration under its jurisdiction, initiated a forced collection procedure even before the final decision of the court.

Južne vesti’s founder and director, Vitomir Ognjanović, considers that penalising this portal on the basis of a regulation that relates exclusively to the public sector represents a dangerous precedent that could break all small media outlets working in the public interest. He believes that Južne vesti has become a “thorn in the side” of the state due to its reporting.

Južne vesti considered that this is about a tried-and-tested recipe for shutting down media companies, pointing to the case of Vranjskih novina [Vranje newspapers], which ceased publishing following tax controls conducted last year. Over the past few months, the Niš portal has warned that tax inspectors are also checking their business partners and intimidating partners’ family members.

In the six-monthly report of the European Commission reviewing the situation in chapters 23 and 24 of Serbia’s EU accession process it is stated that numerous media representatives have stated “claims that fiscal inspections are disproportionately used to exert economic pressure on media outlets”.

Serbia’s three largest journalists’ associations (UNS, NUNS and NDNV) emphasised that the Tax Administration is used to pressure the media and that they will seek, in a meeting with representatives of the Serbian government, that this case be re-examined and that the torture of Južne vesti by tax officers be halted.

Serbian Prime Minister Ana Brnabić said that if “Južne vesti thinks that the Tax Administration isn’t working well, they can complain”. She was already familiar with the intensive tax controls over Južne vesti, because the problems of this portal were pointed out to her several months ago by OSCE representative Harlem Désir. The Prime Minister then called on the Tax Administration to end its controls if there was no reason for them. However, instead of being suspended, these controls were immediately intensified.