Taxpayer\u27s Right in Kosovo

Tax revenues constitute a large portion of budget revenues in Kosovo; therefore, an effective tax system is of utmost importance, especially since Kosovo remains a country in development. This report focuses on a specific section of the tax system which is the taxpayers’ rights, and analyzes cases where such a system fails to respect these rights. Specifically, the analysis is conducted by focusing on the level of education among taxpayers regarding their rights and cases of violations reported by taxpayers. This report presents a critical review of the factors leading to the violation of taxpayers’ rights and the consequences of such violations; and ultimately, it attempts to identify possible solutions for increasing the awareness among taxpayers of their rights and reducing the cases of their violation. This research is conducted using a qualitative methodology. It combines literature review and analysis of current Tax Administration of Kosovo (TAK) publications, the tax legislation of Kosovo, as well as a collection of primary data gathered through interviews and two small-scale surveys. Among the 11 interviews conducted, there are several stakeholders from the Ministry of Finance, Tax Administration of Kosovo as well as the business community. The surveys were conducted with two groups of taxpayers: large taxpayers, namely the corporations and small individual taxpayers. The information gathered from the surveys and interviews shows that there is a low level of awareness among taxpayers regarding their rights and there are issues with enforcing them, especially with inefficient investigation procedures. The greatest concern regarding taxpayers’ rights results to be the violation of the right to pay no more than the correct amount. By being illegitimately and unfairly charged more than the correct amount liable, taxpayers face unforeseen financial difficulties. In some cases this has resulted in significant losses for companies which have had to lay off employees and pay additional costs to defend themselves. Moreover, the right to appeal, which in principle should serve to protect taxpayers from any unjust and unlawful actions, is not exercised by taxpayers in many cases due to the long and costly procedure. As a result, complying with the law becomes more expensive for taxpayers, consequently creating barriers for doing business in Kosovo as well as incentives for evading taxes