BELGRADE, 14.08.2018. – On August 14, 2018, worried with developments around Juzne vesti portal the Independent Journalists’ Association of Serbia sent the following letter of concern to many international organisations and institutions.
Dear colleagues,
The Independent Journalists’ Association of Serbia again draws attention to the selective use of legal mechanisms and abuse of authority and law by the Serbian tax inspection aimed at hindering media’s work and cause financial and reputational damage that can potentially close them. Series of inspection visits to Vranjske weekly and increasing political pressures, brought to international attention by the hunger strike of its owner Vukasin Obradovic, lead to closure of the only independent weekly in the Southern Serbia. After its closure, it transpired no irregularities in the work of media were found.
The case of Nis based Juzne vesti portal once again confirms administrative harassment as a model for pressuring media critical of government. As we informed you earlier, Juzne vesti was subjected to various tax inspections in the last five years. However the last one lasted 6 months and was unorthodox by many standards: it included activating 14 inspectors who showed strong determination and spent working days and weekends at media premises. They visited commercial clients of Juzne vesti and it founder Simplicity Ltd. to check legality of their administration only because of their association with Juzne vesti. Based on Juzne vesti statements, the tax inspectors took actions well beyond their mandate – taking copies of the contracts signed between the Juzne vesti and EU Delegation in Serbia, UN, OSCE and other donors and showing them to clients and family members, explaining those are proof that that Juzne vesti works for foreign (intelligence) services. As a result, the media reported losing commercial clients and employees were put under additional pressure by their family members because of their work.
As this inspection ended, no irregularities were found in the work of Juzne vesti. That, however, did not prevent the inspectors to issue a legal notice obliging Juzne vesti to pay almost millions of dinars based on a regulation not applicable to private media. Juzne vesti filed a complaint to Administrative Court, and then to Tax Administration with a request to postpone the payment until the court decision is made. In a show case of unusual efficiency, the request was rejected within a day and quickly followed by the Ministry of Finance of Serbia procedure to enforce the payment before the Administrative court decision.
The regulation quoted in the disputed Tax Authority notice was based on a Job Catalogue in public services and other organizations in the public sector that defines tasks of editor in chief in public service media – a document not applicable to private ones. After analysing details, Transparency Serbia confirmed this and further challenged the inspector’s conclusion that the chief editor must be in permanent employment in the media as no law stipulates the obligation of the media to have a working editor-in-chief, full or part-time. The notice contains illogical conclusions, details of which we can send upon request, but the message is clear: Juzne vesti must pay significant amount of money now, despite the obvious legal flaws in the Tax Administration decision making that are likely to be overturned in court. The question whether Juzne vesti will even exist when the Court makes the decision remains.
Recent events gave grounds to new alarm and fear that such interpretation of public sector regulations opens yet another mechanism to control and punish private media critical of the government. Additionally, the reaction of the Serbian Prime Minister Brnabic was not in the spirit of much praised announcement that there is a political will to solve problems in the media sector – Brnabic said all Juzne vesti can do is file a complaint and the court will decide. Brnabic failed to address the issue of using public sector regulations on private media or the fact that the tax inspection failed to find any irregularities. She praised the efficiency of the Tax Administration and didn’t comment enforcing the payment that could close the media before the court procedure ends, nor scandalous behaviour of tax inspectors. Brnabic did not address the fact the private media biggest tax debtors, like Pink international company whose debt amounted to almost 10.5 million EUR in 2014, are not being subjected to tax inspections nor enforced debt collection, on the contrary they are supported by the State through illegal credits.
In addition to being illegal, the implementation of the Job Catalogue in public services and other organizations in the public sector on private media opens the doors to State interference in the work of media. It would regulate terms and conditions of editor-in-chief and journalists in private media and that editor-in-chief must hold full time contract. This would lead to penalties to a large number of small, independent media, potentially resulting in their closure. Those not shut or heavily penalised would be aware that the State could shut them if it wants to. In such conditions, freedom of expression and independent journalism cannot exist.
Bearing all of the above in mind, we ask you to use your authority and power to put pressure on the Serbian government to stop with unwarranted tax inspections and other forms of administrative harassment against Juzne vesti and other media, their clients and family members and to prevent implementation of the public sector regulations on private one. The State must question the accountability of civil servants and Tax Authority managers that led to this problem and thus demonstrate its commitment to securing environment in which media and journalists can operate.
While the government formally established bodies that should work to solve problems Serbian media face and, after intense pressure of the international community a new Working group for Media Strategy, none of the proclaimed effort gave tangible results. Hate speech and unacceptable behaviour against journalists and media continues, including that of state officials. Analysis of IJAS database of attacks and pressures show that in 2017 there was 62 recorded cases of intimidations and pressures (30 by state officials) while in 2018, there 34 recorded incidents so far, 18 by the representatives of the state. The court practice continues to contradict that of ECHR, the state aid system is abused and number of small independent media harassed administratively is rising.
We ask of you to raise concerns about the on-going, systematically silencing of critical media in Serbia – starting with the highest officials that can lead the example. Serbia must start upholding the principles of free media and democracy that will allow journalists to report in public interest without fear of losing jobs or, indeed, lives.
Juzne vesti: history of administrative harassment
The first time tax inspectors visited Juzne vesti was in 2013 – they reviewed the financial documentation for eight months. During 2014 inspection checked media business twice: to check if media uses legal software and to seek clarification of its business relationship with some of the clients – companies that are business partners of the Simplicity software company, the owner of the Juzne vesti. In November 2017, a new control took place: two tax inspections arrived to go through the financial documentation of Juzne vesti at the same time.
Formal reasons for all inspection visits are alleged anonymous reports to the Tax Authority. It is important to highlight that the Tax Authority has not detected any problems in the business of this media.
When N1 media asked the Tax Authority about whether this is a common practice, the Authority stated that it is not allowed to share that information quoting Art. 7 of Law on Tax Procedure that each document, information, data or other facts about tax payer under procedure is confidential.
Juzne vesti used the Law on free access to information of public importance to find out how many media are under scrutiny of tax inspectors. The request was denied but overturned by the Commissioner of information of public importance who ordered an immediate release of information to Juzne vesti, but those are yet to be disclosed.
The events coincided with Harlem Desir, OSCE Representative on Freedom of the Media visit to Serbia during which he was briefed about the situation. During Mr Desir saty IJAS published the open letter to Ana Brnabic and on the same day it was reported that PM’s cabinet told said that Brnabic had spoken to the director of Tax Authority on Tuesday, 10.04.2018 about the controls in “Juzne vesti”. It was highlighted that the control should end in the shortest period of time to avoid hindering the work of media, unless there are indications that it should be broadened.
On the same day the control was extended for a month and in the following two days, Blagojevic received information from eight business clients that they received inspection warrants, too.
Juzne vesti journalists, who won prestigious awards for investigative journalism, are facing serious problems continuously. They are being threatened and lawsuits are frequent, while its editor-in-chief was followed and secretly filmed. During public competition for co-financing the production of media content of public interest, local self-governments in southern Serbia regularly avoid the Juzne vesti while pressure is exerted on the companies that advertise on the portal.