Pages: 67-75

Abstract

The state has a key role in business development, but with a clear vision as a regulator of the institutional environment, and not as the governor of businesses. Countries in the transition phase, which also include Kosovo, constantly tried to create more favorable conditions for businesses. This paper presents the administrative procedures that must be passed since the establishment of the business, and continuing maintenance licenses from various institutions, whether at central or local level in the city of Peja. During these procedures, it has been calculated that there is a cost for businesses and a negative impact on the environment too, which comes as a result of various institutions that should be visited. Removal of any of such proceedings is a relief for businesses. This work has confirmed that removal annual municipal tax for businesses (Fee for commercial economic activity) by the local government provides an incentive to do business in the Municipality of Peja. In the paper, there are included statistical data on the situation of business in Peja region, tax revenues for the analysis, and empirical findings. Based on the results it can be seen that the major impact by institutions on the flow of private businesses where businesses of politicians and their relatives are included, is the high corruption, the inability of institutions to fight the corruption, and many other causes that show a negative growth of businesses. The work will also have some important practical scientific issues on how some certain institutions should make a business environment.