Djelic announced the reduction of the Profit Tax

After having participated to the “Second business conference with the Government of the Republic of Serbia”, the Minister of Finance and Economy, Mr. Bozidar Djelic decraed that he will suggest a reduction of the Tax on corptrate profits from the present 20% to 14%, measure which will make Serbia the country with the lowest Tax on Corporate profit rate in the whole Europe, even in the world.

The Minister also announced that the adoption of a new packet of measures for the investment stimulation is to bexpected on the occasion of the next Special session of the Government of the Republic of Serbia, schedulled for September 26th. This packet comprehends, among other measures, those related to the tax regulations, the Parliament should ratifiacte in october. Mr. Djelic announced other fiscal stimulations for domestic and foreign companies investments and new employment creation, meaning a significant fiscal stimulation.
– Our suggestion is that this fiscal credit should represent a 20% of the total investment into basic resources, which will be the highest rate known in Europe, said Mr. Djelic, adding that this stimulation should make this credit avilable on a ten years period.

– Regardin the employment, the currently available stimulation of the 40% deduction of the each new employee gross wage from the Profit tax rate rate, will ne increased up to the whole 100%. This will allow all companies creating new posts, not to deduct 100% of that sum, but even 114% – this percentage is the one which will be deducted before the tax, and paid simultaneously, and it will be in effect for the firs two years of employment, explained Mr. Djelic.

The new packet of fiscal stimulations will additionally reduce the yearly income tax for citizens (by ten percent), making it the lowest citizens income tax rate in Europe, and one among the world’s lowest, concluded Mr. Djelic.
– A more favourable position of the state owned companies, regarding the tax and obligation duties, in the situation the workers created their own company, according to Mr. Djelic’s terms, will be reached through a simplified system, being carried out equitably and regardless the company the workers are working with, which will represent also a significant stimulation for the craftsmen.
As the Finance Minister stated, some acuumulated inetrest rates from the past will b revise and, together with the penalties for tardiness dayly rate of 0.2%, cancelled, in order to reduce all that was ureal by the past.

– Regarding the graey economy wiping out activities, a new law on the fiscal preoceedings has been prepared, aimed to grant a much wider authority to the tax administration to carry out a more intensive control in the grey economy field, said Mr. Djelic, emphasizing that “we will no longer have a series of controls, such as the Tax Administration, the pension fund administration, the public health fund and the work market, because they will all be unified in a single control mechanism.”

The Minister Djelic also announced new legal regulations regarding the copyright law – meaning the piracy and the entertainment field – as well as the real estate market, and all those fields susceptible of being close or in the grey zone. By September 15th, we should pay back some 60 Million Euros of debt to the foreign investors, among which: The European Investment Bank (EIB), The Word Bank, The Paris Club of creditors. Approximately 18 Million Euros, of the mentioned sum, are related to Kosovo, said Mr. Djelic, adding that “the bill will be sent to Mr. Steiner, Mr. Kofi Anan, and all the G7 member countries.”

– Speculations on the captal market have no justification, and we know very well what we can pay back, thus we won’t pay a penny more. He added that the pressure won’t be abandoned regarding the obtaining the writing off of the 2/3 of the yugoslav debt, in the negotiations with the London Club of Creditors, even if, according to Mr. Djelic’s terms – there are more than urealistic pressures coming from the creditors themselves, for the debt rduction.

Speaking of this year planned level of Direct Foreign Investments (DFI) of 500 to 600 million dollars, Mr. Djelic declared taht suggested fiscal stimulative mesures, should increase this level up to 1 Billion dollars, during the following year.

– Regardless the elections results, there is a consensus between the creators of the economic policy on continuing with the same principles, said Mr. Djelic, announcing more rationalization in the domain of functions overlaping, between the Federal nd the Republic administration level.