Fiscal Challenges in Pandemic Times
The unexpected health crises that appeared at the end of 2019 and endures currently had
triggered serious government challenges in conducting efficient fiscal policy. The growing
health, educational, social, and other costs corelated with the health crisis had raised
intense reactions in governments through higher public expenditures that were financed
dominantly from international financial markets. Already higher public debt to GDP ratio
in some countries overcome the Maastricht criteria of this crucial fiscal variable that raised
some serious questions for future government financial responses. This pandemic opened
some suggestions and considerations for major or minor tax reforms in some countries.
If previously the governments were repellent to introduce some tax changes, now they see
opportunity to easily justify this fiscal step. The people subjected to COVID-19 disease are
addressing more publicly the need for substantial government help regarding the health
costs. The IMF surveys show that people who faced this illness are more demanding for
changes in distributional fiscal function. The companies and households with extra profits
and income should be taxed with higher income tax rates and corporate taxes. The reason
for this demand is the ongoing process of unevenly distributed national income that in
pandemic circumstances affects more lower layers of income households. However, the
real sector in North Macedonia is publicly against higher tax rates, and they demand from
government first to legalize the grey economy that they perceived as serious competitive
and fiscal problem.
2. World Bank Group COVID-19 Crisis Response Approach Paper. Saving Lives, Scaling-up Impact and
Getting Back on Track. June 2020.
3. International Monetary Fund, Fiscal Monitor: Policies for the Recovery, October 2020.
4. Chetty, R., J. Friedman, N. Hendren, and M. Stepner. 2020. “How Did COVID-19 and Stabilization
Policies Affect Spending and Employment? A New Real-Time Economic Tracker Based on Private
Sector Data.” Opportunity Insights Working Paper, Harvard University, Cambridge, MA
5. Faria-e-Castro, M. “Fiscal Policy during a Pandemic.” Federal Reserve Bank, St. Louis Working Paper
6. European Central Bank. “Euro Area Bank Lending Survey.” July 14.2020
7. Organisation for Economic Co-operation and Development (OECD). 2020c. “Equity Injections and
Unforeseen State Ownership of Enterprises during the COVID-19 Crisis.” OECD Publishing, Paris.
8. Organisation for Economic Co-operation and Development (OECD). 2020b. “Corporate Sector
Vulnerabilities during the COVID-19 Outbreak: Assessment and Policy Responses.” OECD Publishing,
9. Organisation for Economic Co-operation and Development (OECD). THE COVID-19 CRISIS IN
NORTH MACEDONIA. OECD Publishing, Paris. 2021.
10. Our World in Data (2020), Our World in Data website, https://ourworldindata.org/coronavirus.
11. Ministerstvo za finansii na Severna Makedonija. Predlog za izmenuvanje I dopolnuvanje na buzetot na
R. Severna Makeddonija za 2021 godina. REBALANS-2021-za-sobranie-09.06.2021-1.pdf
12. Ministerstvo za finansii na Severna Makedonija. Sostojba na drzaven I javen dolg zaklucno so 3.2021.
Состојба на долг - finance.gov.mk