LFMI proposes to enhance the system of fees and charges

Continuing its work on tax policy issues, LFMI has analysed the Law on Fees and Charges and submitted to the Parliament and the Government comments on draft amendments to this law. Fees and charges are mandatory payments by private companies for services provided by state and municipal institutions, agencies, offices or organisations, the cost of which must correspond to the cost of the service rendered.

LFMI concluded that the size of certain fees and charges evidently exceeds expenses that are needed for the service provision and that there is no system to ensuring the implementation of the current law. The Institute also pointed out that the size of fees and charge does not ensure the quality of services (products) received, while large payments reduce the profitability of businesses that have not even started activity.

LFMI thinks that all fees and charges collected by state institutions should be regulated by one law; the size of these payments must be calculated rather than fixed and must not exceed the size of the cost of the service. Policy analysts from LFMI also noted that the private sector is allowed to provide only a small number of services that are currently rendered by state and municipal institutions. The Institute believes that private capital would ensure efficient use of resources, market prices and optimal application of the labour force and technologies. Therefore, it is indispensable to envisage a consistent mechanism of handing over the provision of some services to the private sector.