Kučuk: The government entered this like a drunken father; if the economy collapses, the entire system will collapse

SARAJEVO, (Patria) - How will a system function in a pyramid where the government is at the top, and people and the economy are at the bottom, if there is no economy, no jobs, no salaries, then there are no contributions or indirect taxes through purchases, because without a salary there is no consumption. If there are no taxes, there is no budget, then there is no state because there is no debt servicing or anything else, said Ejub Kučuk, owner and director of the marketing agency MITA GROUP, in N1 television's Novi dan.

He added that last night a group called "Voice of Small Businesses" was formed, which gathered about 4,000 small business owners in a few hours.

"To pay salaries and for everything to function, you first have to pay fixed costs. That means loans, utilities, rent... And then you have to cover all taxes. Taxes, contributions, and parafiscal levies, and all of this is calculated on last year's turnover, as if you will do the same this year. Suppliers also come, because many companies at the moment of shutdown have issued invoices to customers, and they also have invoices from suppliers, they have to pay the supplier and the question is whether they can pay it because they haven't collected their invoices. If you issued invoices at the beginning of March, you have to pay VAT on outgoing invoices. When you pay all that, you have to pay contributions and then salaries," explains Kučuk.

He adds that he received information that small businesses have also stopped in strong countries.

"The state is in big trouble, and the government entered this like a drunken father, who comes home, beats his wife and children, breaks everything, and when he wakes up in the morning, he doesn't know what he did. Crisis management, which they entered, and the fact that they first closed everything and then started with disease prevention. That is a terrible decision in which the repercussions on business were not considered. When you shut down the entire tourism, hospitality, all small businesses and crafts, which are mostly family businesses," points out Kučuk.

He states that most companies have no accumulated capital, they have nothing to pay anything from.

"First, entrepreneurs should be exempted from profit tax. Exemption from advance profit tax in 2020. Then, exemption from parafiscal taxes. All countries in the world have decided that companies do not pay contributions, and that the state subsidizes companies that are not operating. Subsidize at least 50 percent of salaries in small companies and crafts. Increase the benefit rate from the bureau for those who are laid off. Urgently amend the VAT Law at the state level. Exempt the payment of VAT for the purchase of medical equipment. Pass an obligatory moratorium on loan installments. We currently have banks saying they will decide who will get a moratorium," Kučuk answered N1's question about possible measures.

Regarding loan moratoriums, Kučuk cited the example of Serbia, where everyone was given the option of a loan moratorium, and those who don't want it can choose to continue paying.

"Now you have companies that cannot import bank guarantees because their funds are frozen. Freight forwarders and carriers told me that the closure of the FIA is announced, and they were told to pay advance fees for everything they plan to import. Where will they get the money from?" he adds.

A balanced budget at all levels is important for everything, he says.

"In such a state, it is possible that out of 10 billion available, at least two billion must be set aside to help the economy. Last night I watched Milorad Dodik say that he must preserve the public sector to preserve the pension fund. That is absolute nonsense, because how will the public sector be paid without taxes from the private sector. For the first time in the world, the economy has stopped. That's why all countries have launched broad and serious actions. Germany 750 billion, the USA 2 trillion have allocated for the economy. When this is over, people must continue to live," emphasizes Kučuk.

He predicts that hundreds of thousands of people could be left without jobs.

"The only possibility is what everyone is preparing for now. The Association of Caterers announced that on April 1st, if they do not receive subsidies, they will send 10,000 people to the bureau. A huge pressure on the bureau is expected, as there will be many technological redundancies. I guarantee that from April 1st to mid-April, the employment bureau will collapse. Concrete measures are not 'it will happen, maybe' or waiting for the virus to pass to act. Forget that," Kučuk advises.

He notes that if the economy collapses, the entire system will collapse.