Focus on Grey Economy 2018

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GREY ECONOMY S P E CIA L S U P P L E ME N T

D I P L O M AC Y & CO M M E RC E 2018


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FOCUS ON 'UNHEALTHY' PART OF ECONOMY

Inspectors are front row centre in combating shadow economy. Hiring younger inspectors and introducing new institutes which, for the first time ever, enable preventive action, as well as much tougher measures against offenders will make this year an exceptionally important one for promotion of the new approach in eliminating this negative occurrence

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he Ministry of State Administration and Local Self-Government has one of the most important roles in combating shadow economy.

The National Programme for Combating Shadow Economy was drafted in late 2015. What makes this year special compared to the previous period, in this context? — At a meeting of the Expert Group for Combating Shadow Economy, we concluded that all the activities, carried out under the framework of measures aimed at achieving the goals stated in the National Programme, such as building the capacity of inspections, should be considered priorities. To illustrate this point, let me mention an action plan for hiring younger inspectors which is considered a high priority measure, primarily because there are really very few inspectors in Serbia, with the average age of an inspector being 54. Also, new measures are being implemented in cooperation with the Justice System and the Ministry of Justice, which has been actively participating in improving the legal-judicial practice in combating shadow economy. Which segments does the Ministry

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cover in terms of the work done by the Coordination Body for Combating Shadow Economy and the Expert Group? — I have been personally participating in the work done by this body and I would like to underline that two of four goals from the National Programme are primarily implemented through the measures managed by the Ministry of State Administration and Local Self-Government. More efficient monitoring of the developments in the shadow economy, which is one of the set goals, is achieved primarily by improving the inspection supervision system that the Ministry covers with its Coordination Commission for Inspection Supervision. Building the capacity of inspections for planning, implementation and reporting on inspection supervision, establishing mechanisms for ensuring transparency of inspection supervision and ensuring interaction with citizens and businesses are the main activities that the Ministry is implementing with the view of achieving the objectives of this fight against shadow economy. Raising awareness among citizens and businesses about the importance of fighting shadow economy and ensuring there is enough motivation for ad-

BRANKO RUŽIĆ Minister of State Administration and Local Self-Government in the Serbian government

We have tailormade the entire reform and the system to result in an improved business environment and I am very pleased to see that businesses have been reacting so positively to all the changes that we've been implementing

hering to regulation are also the goals that the Ministry has been realizing primarily through organizing the "Take the receipt and win" prize game, but also through promotional activities related to the new "Inspection Approach" where businesses are continuously informed of their rights. Thanks to the campaign on creating a new image of inspection jobs, we are beginning to underline the importance of changing the awareness about the role that inspectors have in fighting for a better society as a whole, but also about the importance of joining forces, i.e. state institutions, businesses and citizens jointly participating in the fight against shadow economy. Inspections are an important factor in eliminating shadow economy, and in the past period, the legal framework and the reform of the work done by inspections have received a lot of praise from the investors. How much should inspectors be credited for the results accomplished in combating shadow economy? — Inspectors are front row centre in combating shadow economy, while the Law on Inspection Supervision stipulates a novelty that is quite revolutionary for our system, and that is inspection supervision of unregistered business entities.


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In the past, inspectors were not allowed to enter, for instance, an unregistered boutique that is located in a flat, or penalize street vendors for selling things with cardboard boxes as their stands. Today, inspectors can do this and this is where the focus lies, namely on the "unhealthy" part of our economy, i.e. those people who consciously and deliberately violate the law by going against fair competition and market rules while jeopardizing the safety of people, our property and the environment. Serbian inspections also have another new role to play, that is being, first and foremost, advisors to businesses. The system that we are putting in place closely follows the history of a business, which determines an inspector's approach towards that business entity, namely whether an inspector will act as a partner to a "good business", or act in a repressive manner towards those subjects who are deliberately operating in shadow economy, or violating the law. Regarding your question about concrete results that illustrate the importance of inspectors in fighting shadow economy, let me just say that, since the beginning of the implementation of the law in January 2018, out of 784,275 inspection supervisions, 10,414 were carried out in unregistered business entities. Also in January 2018, the Labour Inspectorate found 781 undocumented workers with 675 becoming documented workers following the supervision. In stark contrast to the previous model, the Coordination Commission for Inspection Supervision now functions in an inclusive manner. How receptive are businesses towards this preventive-educational approach? — We have tailor-made the entire reform and the system to result in an improved business environment and I am very pleased to see that businesses have been reacting so positively to all the changes that we've been implementing. According to the latest survey from 2017, only 13% of business people consider inspectors an aggravating factor in business, while in 2011, this percentage stood at over 50. I would also like to underline that businesses wanted this law to be passed and that from the beginning of the reform, we have been working closely with all business associations. Their participation in the Coordination Commission is very important to us, because they help us to better understand the situation and come up with better solutions.

The Economic Advisor Office is expected to be opened soon. What will be the Office's role in combating shadow economy? — Throughout this entire inspection reform project, the Ministry has been enjoying a great support from USAID BEP, EBRD and NALED. EBRD provided assistance for the institution of Economic Advisor for Inspection Supervision which is yet another reformatory step in this segment. The Advisor will become a permanent communication channel between businesses and the state in issues that concern inspection supervision, i.e. the place where businesses will be able to obtain information, inquire, voice problems and get advice. How interested are local authorities in this year's „Take the receipt and win“ prize game? Which municipalities have shown the biggest agility and what prizes await the winners? — One of the measures of the National Programme for Combating Shadow Economy (which gave birth to the idea for this prize game) is aimed at motivating citizens to take receipts for pur-

chased goods, and by doing so, are actually contributing to the 20% tax not ending up in the hands of negligent shop owners and caterers, but rather it being spent on schools, hospitals and roads. In this round, we are giving prizes to municipalities which population was the agilest in participating in the prize game because we want to practically demonstrate where the taxpayers' money ends up. The municipalities rewarded last year invested in the construction of schools, tourist info centres, children's playgrounds, taking care of historical-archaeological sites and restoration of public squares.

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BUSINESSES & THE STATE The Inspection Supervision Advisor will become a permanent communication channel between businesses and the state, i.e. the place where businesses will be able to obtain information, inquire, voice problems and get advice.

In this round, the prize fund was increased from 100,000 EUR to over 200,000 EUR, and instead of only 5 municipalities, this time around we are going to reward 9 municipalities which citizens were the most diligent in sending the receipts they collected. These municipalities will be awarded 23,000 EUR each, in dinar counter value, that should be spent on implementing projects like providing equipment and renovating public facilities and spaces, as chosen by their citizens. Currently, Blace, Savski Venac and Vranje are the leading municipalities, each in their own category. What impact does this game have on the municipalities' interest in participating in the fight against shadow economy in the long run? Where do you see the most room for them to work on combating shadow economy? — Better the tax collection, more money there will be in the budgets for roads, schools, health centres. And we are not only talking about the state ones but also the local ones too, because income tax is considered one of the direct revenues for local budgets, so, I would say, that they are very interested in combating shadow economy at the local level. What are the Ministry's further plans for this segment? — Our plan is to further build the inspection services, staff- and financially-wise, in order to meet all the requirements imposed by the reform. We also plan to improve the reputation of inspectors, because the goal of everything we do in the field of inspection services is not people fearing business inspectors, but rather come to understanding that inspectors are here to ensure that laws apply to everyone equally, that everyone has the same obligation in terms of paying taxes, documenting their employees, marketing safe products and protecting the environment. Inspections are concerned with our safety, they control the sanitary conditions and the food we eat in restaurants, schools and nurseries, and the safety of the playgrounds our children play on. Hence, it is important for the public to understand that inspections are not our enemies, but that they are, despite an insufficient number of them and the difficult working conditions, in the forefront of fighting for our security, health and a fair business environment. This is why fighting against shadow economy is something that all of us – the state (inspectors), businesses and citizens – are involved in.

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EVERY INDIVIDUAL CONTRIBUTION MATTERS

All of us should contribute to reduction of shadow economy which is very important for the progress of a contemporary society like ours I N T E RV I E W

DRAGANA MARKOVIĆ Director of the Republic of Serbia's Tax Administration

he Tax Administration should be given a lot of credit for reducing the volume of the shadow economy. As always, I would like to underline that the Tax Administration is the forefront of this fight, and that shadow economy is a problem for the society as a whole. Each individual should contribute to that fight. Only by doing so, all of us, individuals and the society, will benefit as a result of creation of new jobs, better education, healthcare, roads and improved security.

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How big is the segment of the shadow economy that the Tax Administration currently has no control over? — It is very important to point out that, although still high, the volume of the shadow economy has been shrinking in the last five years, and this, among other things, is a result of the harsher penal policy and more efficient tax collection. Based on the National Programme and the Action Plan, the Tax Administration has been continuously carrying out various activities, in order to reduce the volume of the shadow economy. One of the important prerequisites for achieving this is to have the retail segment under control, which means recording each sale with cash registers. Also, as a part of this control process, the work / legal status of employees is regularly checked. The Tax Administration also regularly controls the persons engaged in

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unregistered business activities. One of the anti-shadow economy measures entails a ban on deleting taxpayers, or rather business entities from the Serbian Business Register’s database if a proper written confirmation of paid taxes is not submitted first. Also, thanks to the single consolidated billing account, disbursement of salaries, without calculated taxes and contributions, has been disabled. The overall efficiency of tax control has been improved thanks to the introduction of the strategic risk analysis and the implementation of targeted controls. Namely, in 2017, we formed a new organizational unit for strategic risk management. In this way, we can determine the "deviant" behaviour of taxpayers who refuse to comply with regulation, their motives for doing so, and strategies for eliminating these kinds of occurrences. All activities undertaken by the Tax Administration are focused on increasing voluntary compliance with regulations, identifying taxpayers who refuse to obey these regulations, and creating an environment that facilitates easier and fairer business conditions. What are the key factors that contributed to improved tax collection and reduction in the number of business entities that fail to fulfill their obligations? — The Tax Administration carries out first regular then enforced collection of the most important taxes in line with the submitted tax returns and advance tax obligations, as well as collection of other taxes. Additionally, the Tax Administration carries out regular and enforced collection of the total tax debt on the basis of public revenues, from all taxpayers who have no legal impediments for forced collection.

Consequently, a good collection of public revenues is conditioned by the efficient collection of current liabilities on the basis of public revenues, but also by carrying out measures and actions pertaining to regular and enforced collection of public revenues by the Tax Administration. How much did implementing e-solutions contribute to easier and better tax collection? — We have significantly improved the tax administration processes by introducing new technologies and developing electronic systems. This is also noted in the report compiled by the World Bank on the payment of taxes in 2018, which declared Serbia as the best country in Eastern Europe and Central Asia in this aspect. As of 1st January 2018, taxpayers can submit all their tax returns electronically, through the Tax Administration Portal, which enables quick, simple and secure filing of tax returns from the taxpayers’ computer. The services available on the ePorezi website are free of charge and available every day from 6am to midnight. On the Tax Administration’s website, you can download a video and user instructions on the manners and procedures for filing electronic tax returns. In the forthcoming period, we are planning to work on further improving our electronic services, firstly by enabling the issuance of tax certificates in electronic form, which would further reduce the costs and the time needed to obtain a tax certificate.

What are the results of the new preventive actions conducted by tax inspection on combating shadow economy? — In mid-2017, we opened specialized counters, collectively called Your Tax Auditor (Vaš Poreznik), in 37 of our offices across Serbia where taxpayers can obtain information and get brochures with the aim of resolving their current tax problems and them voluntarily settling their tax obligations. These counters are intended for all citizens, and they need to develop a wider range of service channels, which will make it easier for taxpayers to settle all their tax obligations in one place. Our promotional activities were focused on education. We created a series of video clips called "Pay taxes and benefit in return” with the help from GIZ. In cooperation with the Ministry of Education we are implementing the "Tax Class" (Poreski Čas) project in elementary schools in an effort to start developing tax payment culture at the earliest age. A few years ago, we launched a website for reporting all tax irregularities called Tax Alert (Poreski Alarm), on which people can submit reports, anonymously and with provided information, on detected irregularities in business entities. There is also the “Take the receipt and win” prize game which has been extremely popular. In this way, we are raising citizens' awareness about the importance of taking receipts for purchased goods.


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PROSPECTS OF CASHLESS ECONOMY – WHY SHOULD WE ALL CARE? Embracing the possibilities that technology offers is the key in Serbia. Reimagining traditional financial services to better utilise technology – be it mobile technology, biometrics, Blockchain or anything else, presents a huge opportunity to cut costs and level the financial playing field for both consumers and businesses C O R P O R AT E

ne of the biggest news last year was the prediction of the Swedish Central Bank that the country would abolish cash by 2023. The news was received with awe and anticipation, but certainly not surprise, because for years Swedish economy has been promoted as a cashless one, with currently more than 95% of all consumer transactions being handled by cards and digital wallets. From my own experience I can tell you that We don’t accept cash signs are a regular fixture in a majority of shop windows. And it’s not only Sweden paving a cashless road toward electronic future of commerce: • Danish central bank stopped printing banknotes and shut down its sole remaining mint last year; • In 2016 in the UK, an average person carried in their pocket less than £5 in cash; • India pulled 86% of existing currency from circulation in order to demonetize the country’s shadow economy and expand mobile banking; • Vietnam announced a bold initiative to become a 90% cashless retail economy by 2020. Growing a cashless economy may be a complex task from the regulatory stand-point, but from the perspective of business and technology, it’s clearly more efficient and productive. It is part of the broader digital reformation which is based on our need and abili-

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JELENA RISTIĆ Country Manager for Serbia, Montenegro and Bosnia and Herzegovina, Mastercard

Serbian consumers, businesses and government are realizing that they can grow thanks to technology is a critical point for Serbia’s cashless path

ty to interact and transact seamlessly, instantly and globally. This is why the shift to a cashless economy is being essentially driven by consumers and innovators determined to disrupt business as usual. Basically, consumers want to use payment methods that are intuitive, familiar and already baked into their devices, like contactless mobile payments and, increasingly, paying-by-link in their social channels. They want safe shortcuts for their everyday activities and technologies give them precisely that, with a major side bonus for the market – traceability of financial flows. Here in Serbia, the importance of growing cashless society has been recognized and tackled widely from the standpoint of its correlation to fight against shadow economy. Some impactful mechanisms have already been established, such as tighter financial controls and the second round of a highly efficient initiative - lottery with fiscal receipts and card slips – which last year yielded 18.5% increase in the number of card transactions, and we hope that it will also have a more long-term educational effect on the consumers and business entities in terms of the importance of transaction recording. At the same time, the number of points of sales accepting cashless payments – and more importantly contactless and a few mobile payment options as well - is steadily growing. Our MasterIndex studies have shown that peo-

ple want to use their cards in taxis, public transportation and state institutions - now they can. They want to have the same choice of form of payments at open markets – let’s see when we can make it happen. Postal orders are still prominent on the market, but now that we have enabled direct transfers between physical entities - the socalled P2P payments – though the Balkans premiere of our MoneySend service, which offers high convenience and safety as additional motif for consumers to switch from cash to cashless, it is to be expected that postal orders will be going out of style soon. For us, the actual tapping into the opportunity for growth that technologies innately bring is the core difference between Sweden and Serbia. Embracing the possibilities that technology offers is the key. Reimagining traditional financial services to better utilise technology – be it mobile technology, biometrics, Blockchain or anything else, presents a huge opportunity to cut costs and level the financial playing field for both consumers and businesses. This moment we’re in, when the Serbian consumers, businesses and government are realizing that they can grow thanks to technology is a critical point for Serbia’s cashless path. Actually using this momentum would ensure that Serbian economy is fit for the future and give it a chance to keep pace with technological changes which are yet to come.

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COMPLICATED PROCEDURES ARE PUSHING COMPANIES INTO SHADOW ECONOMY To a responsible businessman, shadow economy is one of the most pronounced types of unfair competition. Improving inspection supervision and more efficient court processing of offenders, further reform of the fiscal system and creating a stimulating environment for private business are some of the most important measures to combat the shadow economy I N T E RV I E W

lthough the structure of the shadow economy economy has remained unchanged over the past five years, positive institutional changes advocated by NALED have led to significant changes in the operations of registered companies says Aleksandar Ružević, Chairman of NALED’s Managing Board and General Manager of Coca-Cola HBC Serbia.

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Your analysis shows that one-third of registered businesses engage in some form of gray economy. How much is this consequence of still relatively significant barriers to business? — The analysis, titled Shadow Economy in Serbia 2017, conducted by NALED with the support of German Development Cooperation, showed that the volume of the shadow economy among the registered companies has been reduced from 21.2% to 15.4% of GDP in the last five years. The problem that is quite pronounced here is a large number of unregistered companies, as much as 17.2% of the total number of companies, which is three times higher than in the Baltic countries which served as the reference point. In total numbers, this means that one in three companies

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are involved in some form of shadow economy. 82% of company owners or managers that the transition to the shadow zone mostly occur due to high taxes and wage contributions, while 78% list parafiscal charges as the reason. The fact remains that the macroeconomic environment is now more favourable than a few years ago, but businesses continues to face numerous administrative obstacles, which can quickly be circumvented by doing business contrary to the relevant regulation. Every year, in its Grey Book, NALED cites 100 complicated procedures with proposals for their simplification. In the first 10 issues of the Book, NALED member companies and experts gave over 200 proposals, but the pace of the problem resolution was not satisfactory, since the state authorities adopt only nine recommendations from the Grey Book on an annual basis. Why are businesses more prone to violating regulations related employment and salaries than other regulation? — The analysis has shown that out of 100 dinars earned in the shadow economy, about 62 dinars was generated from having undocumented workers, and 38

ALEKSANDAR RUŽEVIĆ Chairman of NALED’s Managing Board and General Manager of Coca-Cola HBC Serbia

In the last five years, significant progress has been made in eliminating undocumented work, with the percentage of firms that have undocumented workers halved

dinars from not declaring profit. Business people have been complaining for years that the tax burden on wages is high, and that there is little progress made in taxation compared to other countries, which results in lower wages being more burdened with taxes. It is precisely the income tax and the social contributions the single biggest expense in almost every company, and companies look to reduce these costs by partly or totally avoiding payment. The likelihood that companies, which recorded loss, will move onto shadow economy is twice as high than successful companies and therefore we must enable them to earn money by creating a better business environment. Nevertheless, it is important to note that, in the last five years, a significant shift has been made in eliminating undocumented work, so the percentage of firms that have undocumented workers has been halved, from 20.5% to 10.8%. How did the structure of the shadow economy change compare to your analysis in the last five years? — The structure has not changed much since the same forms of shadow economy, such as having undocumented


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workers, smuggling, failure to issue reciepts, unregistered production and unregistered provision of services, are still present. What we have noticed is that small business owners are more prone to operating in shadow economy compared to big companies. Those which do not have any employees or do business with affiliated entities are particularly at risk. Also, newer companies are more susceptible to engaging into shadow economy than those experienced, but in comparison to 2012, this difference has decreased. Where are the hardest pockets of the shadow economy when it comes to registered businesses and are there institutional solutions that can respond to these challenges? — Today, shadow economy is most pronounced in agriculture and catering, and there was no change in comparison to 2012, followed by construction industry. However, some progress in reducing shadow economy in this sector has been made thanks to the reforms of the construction permitting system. Also, transport companies are now more likely to engage in shadow economy. In late 2014, following the initiative by NALED and socially responsible companies assembled in the Fair Competition Alliance, the Serbian government launched a systematic fight against the shadow economy. An inter-ministerial Coordinating Body and Expert Group were formed, which, for the first time, brought together line institutions, businesses and civil sector to work on the same task. A year later, a strategic document called The National Programme for Combatting Shadow Economy was adopted, envisaging more than 100 measures and activities divided into four groups - improvement of inspection supervision and more efficient processing shadow economy segments,introduction of incentive measures and stimulating compliance among businesses, reducing administrative and financial burdens on businesses, and raising public awareness of the importance of combating shadow economy. Regardless of the fact that you have not dealt with analyzing unregistered companies, do you have any knowledge of what keeps them in shadow economy? — Unregistered companies could be divided into two groups. One segment is made up of companies that cannot deal with the burden of high state-imposed fees and bureaucracy, and most often

operate from the shadow zone from the very beginning. The other segment is comprised of those companies which do not want to do business legally at all and we call these companies as belonging to black / criminal economy. One of the things that the National Programme is focusing on is precisely detecting such “companies”. To a responsible businessman, shadow economy is one of the most pronounced types of unfair competition, which robs the state of billions of euros in revenue that could be used towards bigger social spending, better health care, better education, culture, infrastructure and in general, for better quality of public services.

Also, the prize game has contributed to the increase in reporting non-issuance of receipts, but has also educated citizens how to recognize what the proper cash register receipt looks like. What kind of relation should there be between incentives and repressive measures in order to establish longterm tax discipline? — The measures for increasing tax discipline must be balanced. On one hand, repressive mesasures are needed in order for the state to send a strong signal that same and fair market conditions apply to everyone, and to punish anyone who does not want to comply with the regulation. The incentives are in place for businesses to have a motive to voluntarily operate in line with the law and settle their obligations towards the state and their employees. NALED insists on implementing tax exemption measures for new businesses, reducing labour tax burdens and eliminating para-fiscal charges.

How much can campaigns for promotion of tax discipline help reduce the share that shadow economy has in overall economy? What are the results of the "Take the receipt and win" prize game? — Our research data and the data collated by the Serbian Tax Administration show that organizing prize games has had significant effects. 37% of Serbian citizens took part in the first round of this prize game which is almost four times more than in Slovakiat, that was our reference point. The support shown by citizens towards combating shadow economy has reached 94%, which is an outstanding result. Positive fiscal

effects have also been accomplished. In the first quarter of 2017, there was a 7.64% increase in issuing receipts, especially in small shops, where shadow economy is occurring the most (33%). At the same time, the number of card payments has increased by almost 20%, which is a certain way to register turnover and tax. The six sectors, observed by Tax Administration, recorded a turnover of 91 billion dinars, which, if we apply a lower VAT rate of 10%, has resulted in 9.1 billion higher state budget revenue.

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PRIORITIES An even stronger educational campaign on the importance of curbing shadow economy and strengthening tax culture and discipline are also important priorities.

Given that the level of shadow economy among the registered businesses is somewhere close to the European average, which direction should the battle against shadow economy take in the upcoming period? — I would like to highlight three key lines of action in the next few years, which are part of the National Programme for Combating of Shadow Economy. Improving inspection to detect companies engaged in shadow economy must be the first priority of the action plan, as well as more efficient processing of such behaviour, because, according to the findings of our study, only 24%, or every fourth business owner are convinced that doing business against relevant regulation will be penalized. The emphasis should also be on further improving the fiscal system and improving the collection of receivables through measures such as the improvement and expansion of fiscalization’s reach, the development of entrepreneurship through implementing incentive measures, and the reduction of non-tax burden by finalizing the parafiscal reform. In the end, success in combating shadow economy will depend also on changing the perception and awareness of citizens and businesses about operating in the grey area. NALED thinks that the third priority must be an even stronger educational campaign on the importance of curbing shadow economy and strengthening tax culture and discipline.

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SUCCESSFUL AND RESPONSIBLE

As a result of the best practices and positive management in 2017, State lottery of Serbia has achieved the income increase of 23% in comparison to 2016. It injected almost two billion of dinars in the Serbian budget, all based on lottery games operation taxes, prize taxes and previous year’s profit share I N T E RV I E W

ransparency in business is very important in the lottery business and the management of the State lottery of Serbia pays a lot of attention to it, says Simonida Kažić, Acting CEO, of the State lottery of Serbia.

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In which way the lucky draw games are regulated and how this area of business is contributing to all-out fight against grey economy? — Countries all around the globe, with more or less developed economies, have the same practice in the field of lottery games regulatory. Republic of Serbia has the same approach, and it is regulated with the Law of lottery games. In our case, Državna lutrija Srbije has the single right to operate classic lottery games, where apart from our lottery brands LOTO, BINGO and GREB GREB, we have the operation of „tombola“ through third party legal entities, i.e. operators. As a result of best practices and positive management during last year, we have achieved the income increase of 23% in comparison to 2016, and the total revenue of Državne lutrije Srbije reached 6.148.406.000 dinars. That’s why we can brag with the amount of almost two billion of dinars that is injected in the budget of Republic of Serbia, all based on lottery games operation taxes, prize taxes and previous year’s profit share. In what extent is the lottery games operation digitalized and how do you rate DLS in terms of innovations with other similar companies in the region? — In line with development of new technologies and global trends, Državna lu-

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SIMONIDA KAŽIĆ Acting CEO, Državna lutrija Srbije (State lottery of Serbia)

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ONLINE GAMES Big part of business development in 2018 will be dedicated to online games on our portal www.lutrija.rs.

trija Srbije does not lag behind similar companies in the region, though we must highlight one business segment that differentiates us and gives the competitive advantage. Državna lutrija Srbije has developed comprehensive online lottery system „AVALON“ that offers all relevant functions of lottery business. The software is developed according to highest standards in online lottery industry and it is designed for existing and new lottery markets. On the other hand, big part of business development in 2018 will be dedicated to online games on our portal www.lutrija.rs . By this step, we approached the new digital savvy generation and enabled fast and easy gaming through online registration, confirmation with card pick up at the POS, and the game can begin. Which factors contributed to significant growth of revenues for Državna lutrija Srbije? — Our care is focused to customers and their needs, and that is why we invest in online, while on the other hand, we in Državna lutrija Srbije still are taking exceptional care of our traditional players and the innovation is the key element for our recent prosperity. We intensively work on our visual identity improvements, new game designs, portfolio extensions, with special attention to new modern scenography in TV shows of our lucky draw games LOTO and BINGO. Also, by introduction of special draws that include valuable prizes and additional money bonuses, we contributed to increased number of lucky draw games players. For June we an-

nounced the first „MULTIMEDIJALNO ZAGREBAVANJE“ that will give second chance for winning the prize through collection of non-winning scratch cards. Today it is highly important to connect player, POS, internet, traditional media, because we know that the interaction and presence through all communication channels is key success factor for this type of promotion. How big is the influence of new technologies on security level increase and data protection for players? — Digital transformation is the road to revenue increase for companies that are dependent on mass sales. Optimization for all type of devices, desktop interface with mobile and tablets, is also highly important because it keeps customers in their comfort zone which they are used to. We must highlight that Državna lutrija Srbije has certificate „E-Trustmark“ that means we do comply with all criteria for being trusted and reliable e-market operator. Državna lutrija Srbije is the member of „The European Lotteries“ and „World Lottery Association“, and principles of both organizations in sense of responsible lottery games operation are fully implemented in terms of social responsibility and players protection. Državna lutrija Srbije, as the lottery game operator adjusted the operation with the new Law of money laundering and terrorist funding prevention. Also, according to Law of personal data protection, we are personally verifying age of all registered online players, because we must be sure they are of legal age, above 18.


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