The Lithuanian Free Market Institute has examined draft amendments to the Law on Tax Administration, the Law on Value Added Tax and the Road Transport Code aimed at the implementation of the smart tax administration system “iMAS” in the State Tax Inspectorate and submitted its comments and proposals.
In LFMI’s view, the system should not be implemented due to the following reasons:
1. The system is expensive to implement and may not be operational;
2. due to a great variety in the complexity and functions of the software used by different economic operators, their data files may be incompatible with standard requirements of “iMAS”;
3. the proposed requirements pose a significant burden on small businesses;
4. it is expensive and time-consuming to reprogram sophisticated accounting software so that it would be compatible with “iMAS”;
5. the financial impact on businesses and possible alternatives to the system are not fully evaluated;
6. the proposed regulation is overlapping and will not reduce the administrative burden on businesses.
In the light of the aforementioned, LFMI suggests the following:
1. To conduct a research and make sure that the proposed regulation is not overlapping;
2. to evaluate whether or not all economic operators will be able to comply with standard requirements of “iMAS” and what will be the costs;
3. to take into account the position and evaluation of economic operators;
4. to raise public awareness of the upcoming changes in tax administration;
5. to evaluate the administrative burden on small businesses;
6. to assess alternative means of reducing administrative burden and improving the tax system.
The full position paper (in Lithuanian) is available at http://www.llri.lt/naujienos/ekonomine-politika/ekspertize-del-ismaniosios-mokesciu-administravimo-sistemos-imas/lrinka