Serbia: CSOs Seen By Government as Rivals and Necessary Evil
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Six years after the democratic changes, the non-profit sector in Serbia still waits for legislation that would regulate its work and its relations with the state. Although both Governments that ruled after 2000 announced a new law on citizens’ associations, and in spite of the fact that, by virtue of its acceptance for Council of Europe membership in April 2003 it accepted the obligation to adopt such a law within a year, the legal status of NGOs is still regulated by the old Yugoslav Law on Association of Citizens, Social and Political Organizations and the 1982 Serbian Law on Social Organizations and Citizens’ Associations.
For that reason, there are two legal ways to register an organization in Serbia today: with the Ministry of the Interior as regulated by the Serbian Law, or with the Ministry of State Administration and Local Self-government, as required by the federal Law. At least the Law on Legacies, Foundations and Funds has regulated the work of those organizations, for which the Ministry of Culture is in charge. Although they provide for a relatively simple registration procedure, these laws are outdated and unsuited to the current needs of the non-profit sector. They never mention the cooperation between the state and the non-governmental sector, nor is there legally regulated manner for the NGOs to compete for budget funding for their projects or to, say, rent or receive the right to use state-owned office space for their activities. "All forms of cooperation between the state, territorial autonomy and local authorities are conducted on fully ad hoc basis, which, naturally, creates conditions for fully arbitrary approach by the state and lack of legal security and reduced dependence of NGOs on foreign donations”, says Tatjana Pavlovic – Krisanic in her Analysis of Legal Framework for Civil Society Activities in Serbia, prepared for ProConcept. Last June, the Government of Serbia adopted the Draft Law on Civic Associations, which was later harmonized with the positions held by the non-profit sector representatives, but only after strong pressure by OSCE, Council of Europe and EU. The Law, however, never made it to the Parliament to be adopted before the January 21 Elections. Thus, at this moment, when the consultations on the new Government has just begun, it is hard to say whether this Draft will appear in front of the New Parliament or if the text will undergo further changes. The Draft-Law simplifies the procedure for registration of civic association, which is now voluntary, and the number of people necessary to establish an NGO was reduced to three citizens. The Draft guarantees freedom of action, but also provides for the possibility to ban an NGO that violates the Constitution. A foreign association’s representative office has the right to work freely in Serbia. However, foreign non-governmental organization can also be banned from working in the country if involved in violations of the Constitution and the Law, on basis of a decision adopted by Serbian Supreme Court. The draft also provides that an association may acquire property and assets through charges of membership fee, voluntary contributions, donations and gifts (in money or goods), financial subsidies, legacies, interest collected on bank savings, real estate rentals, dividends and other ways, in accordance with the Law. It provides for the state, province or local-self-governments to give grants and donations to NGOs. Civic associations that have received public subsidies have to submit a report on financial operations and use of funds at least once per year. Non-Profit Organizations as Small Enterprises Nevertheless, even if the Law on Association is adopted soon, the non-profit sector in Serbia will have to fight for a series of additional legal solutions that would provide for NGO’s sustainability. This is a whole set of new laws on financial status and position of non-profit sector. Namely, the tax legislation in Serbia doesn’t make a difference between the NGOs and other for-profit organizations. The non-profit organizations, just as their for-profit counterparts, have to pay VAT, taxes and social allowances for their employees, as well as tax on procurements of equipment. The Politika daily noted, in February 2005, that the Homeless Shelter, in spite of the fact that it provides for the socially most vulnerable groups, has to pay the Value Added Tax on the food it procures for the homeless people. At the same time, the Members of the Parliament don’t pay VAT on their meals in the Skupstina’s cafeteria. Several changes and amendments to the Law on VAT were adopted in 2005, to relieve donations and humanitarian assistance from VAT obligations. This ultimately put an end to an absurd situation in which the VAT charged on the humanitarian aid coming from abroad far exceeded the abilities of local recipient organizations to pay it. On the other hand, tax authorities treat individual foreign donations as gifts susceptible to taxation. At the start of this year, the tax authorities decided that Human Rights Lawyers’ Committee (YUCOM) has to pay 5% tax on foreign donations (the gifts tax) as well as 18% tax on donations coming from domestic donors. Just a few non-profit organizations are exempted from VAT obligations, working primarily in the areas of culture and science, as well as registered religious institutions. Having in mind that tax authorities treat them as small enterprises, all NGOs are charged, upon submission of annual balance sheets, to pay income and earnings tax for the previous year, no later than March 10 of a given year. Speaking of the non-profit sector, we should mention the fact that the state doesn’t use its taxation policies to stimulate the business sector to donate to charities and engage in philanthropy. "The benefits that did exist several years ago – say, for contributions to non-profit activities, were terminated and now cover only enterprises. In that regard. ...we propose that companies’ donations to health, education, scientific, humanitarian, religious, environmental and sports activities, are recognized as expenses up to 3.5% of their total income and earnings. The Law also provides that humanitarian expenditures are recognized only if made through registered humanitarian organizations. So, humanitarian payments that donors – legal entities and entrepreneurs realize through humanitarian organizations registered to pursue such activities, are recognized in the tax balance of the donors under the line of total expenditures, to the amount of no more than 3.5% of the total income”, says Tatjana Pavlovic-Krisanic in her analysis. Although there is the Law on Donations and Humanitarian Assistance, there is no legislation on tax relief for contributions to charities and philanthropy. The persons that participated in CIVICUS’ research on Serbian Civil Society Index agree that the existing tax policies don’t stimulate any form of giving to civil society organizations. The Necessary Evil The 2005 survey conducted by Federation of Non-governmental Organizations in Serbia (FeNS), on the situation in the NGO sector in Serbia shows that majority of the 516 organizations included in the survey was not satisfied with the way the sector is treated by the state. Over 62% of them believe that the state is basically uninterested and underestimates the importance of the NGO sector. A quarter of the people polled believe that the state sees the NGOs as rivals and competition. However, usually under strong pressure by the foreign donors that finance individual reform sectors in Serbia, the Government was forced to involve the NGOs in the process of preparation of a series of strategic documents, such as the Poverty Reduction Strategy Paper. One example of good cooperation between the state and non-profit sector is the inclusion of women groups in the training of members of police force on proper actions when dealing with cases of domestic violence. Women groups were also involved in the preparation of the Draft Law on Domestic Violence. This cooperation, fully functional during the Government of Zoran Djindjic, soon expired during Kostunica’s term in office. The overall treatment of the non-profit sector by the state is marked with misunderstanding, often antagonistic view of the NGOs. While there is some support to “benign” organizations – sports or artistic associations, as well as organizations that often take over the social role of the state – the treatment of organizations working in the field of human rights, especially issues related to war crimes and the Hague Tribunal, is openly hostile. In addition to the system of tax rebates, we have enough evidence to support the claim the fact that the state supports just one segment of the non-profit sector in the fact that 40% of the Serbian Budget income coming from games of chance is used to finance the Red Cross and other social organizations and civic associations that implement programmes designed to protect and improve the status of disabled persons, then social welfare institutions, social-humanitarian organizations, sports and local self-government. "The country adopts a selective approach towards the civil society organizations. For instance, it doesn’t interfere in the work of residential building councils, provides some financial support for organizations working on social and health issues, it maintains partnership relations with the part of the sector working on poverty reduction, and is sympathetic towards sports and cultural associations”, reports the CIVICUS Civil Society Index. On the other hand, the CSI quotes the release issued by the European Commission, which states that “the relations with a part of the civil sector and the media that brought up the issues of war crimes, the Srebrenica massacre in particular, the mass graves etc. have deteriorated greatly. The European Commission believes that such a position of the Government reflects its continuing inability to understand the role of civil society and media in democratic societies, as well as tendency to meddle in their work, which is cause for concern”. The hostile approach of the Government to such organizations creates rather negative public sentiment towards the organizations concerned. The Government’s attitudes towards organizations that insist on full implementation of freedom of access to information legislation, corruption reduction, independent judiciary, issues related to armed forces, the environment, etc., is marked by “ignorance rather then partnership, accompanied by occasional beatings, obstructions, seizures, etc.”, ads the CIVICUS Report. In general, the Government treats the non-profit sector as the “necessary evil” and avoids development of partnerships with NGOs. In addition to the Law on Civic Associations, Serbia lacks the proper state bodies or strategic documents that would deal with the non-profit sector. At its annual assembly, held in October 2006, FeNS concluded that one of the priorities should be the work on institutional relations with state institutions, which brings up the need to establish a dialogue between the civil society and official institutions. The FeNS Assembly adopted a decision to direct the activities of the Federation towards preparation of civil society development strategy, in order to secure faster and sustainable development of this important segment of society. |
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