Budget rebalancing supported

The Finance Committee of the Serbian Parliament supported the suggestion relative to the rebalancing of this year’s budget, which should be increased by more than 57 billion dinars. The budget rebalancing is mainly caused by the new state organization, and should provide for the functioning of all the authorities of the new State Community – primarily the military and the diplomacy, said Serbian Finance Minister Bozidar Djelic. The total budget for the current year will amount 318.7 billion dinars – 280 billion being allocated for Serbia and the province of Vojvodina, while 38.7 billion will be allocated for the financing of the State Union of Serbia and Montenegro – explained Minister Djelic.

The initially planned budgetary deficit will remain at the same level of 46.9 billion dinars, and should be covered from foreign donations amounting 14.9 billion dinars, international loan arrangements amounting 12.7 billion, through the privatization process, amounting approximately 12 billion dinars, while the rest of the funds should be provided through internal public debt contracting. The State Union will no longer have independent finances, but will be financed through financial participation quotas of the member countries, with a total amount of 41 billion dinars – Serbia providing 93.3 percent of it, and Montenegro the remaining 6.7 percent. According to Minister Djelic, the aggravated international situation, the lower rate of economic growth and the lower level of foreign investment realization also caused the budget rebalancing. Minister Djelic declared that this Budget represented a continuation budget, without major modifications to the budgetary items, but with a more careful spending of the funds.

Mr. Djelic also explained that all the realized income would be collected in the Serbian treasury, because, as of April 2003, all the excise taxes, customs duties, the flight-over fees… and other federal taxes, are to be brought to the level of the Republic of Serbia… Minister Djelic also announced the correction of the administrative taxes, as well as an increase in the excise tax on oil derivates – with no repercussion on the retail price of these products.