Draft budget till the end of the next week

Mr. Mladjan Dinkic announced today, at his first press conference as the new Finance Minister, that the Ministry of Finance is to submit the 2004 Draft Budget to the Serbian Government till the end of next week. Dinkic said he expects the whole procedure concerning budget adoption to be finished by the end of the month.

The Ministry of Finance will propose a package of new laws such as the Law on Value Added Tax, Law on the Games of Chance, and abolish others, such as the Law on Financial Transactions Tax and certain stipulations of the Law on Excise Goods: “Serbia has a chance to attract investors leaving the South East European countries that are scheduled to join the European Union. In order to achieve this, Serbia needs a competitive edge over the countries joining the European Union. Paradoxical though it may be – the fact that Serbia is not an EU member may be our chance to initiate economic development, since the costs of production in the countries joining EU are bound to increase significantly, because they need to be adjusted to the EU level. We will try to trim tax burden in this segment by a third, and that is going to be the most radical move during this year when it comes to the Ministry of Finance. However, we will adopt the Law on Games of Chance, and thus, to a significant extent, compensate the loss of fiscal revenues coming from the income tax,” said Dinkic.

Minister Dinkic also announced adoption of the Law on Guarantee fund and National Corporation for housing loan insurance, which should enable more favourable conditions for credit raising. “Bearing in mind legal insecurity, which is not easily eliminated on short notice, we have to develop mechanisms for bank loans insurance, in the first place for insurance of loans for development of small and middle sized enterprises. The novelties are agriculture, housing loans, insurance of export operations and insurance of credits for development of underdeveloped regions”.

Dinkic said that the new Government inherited €212 million in the budget and emphasized that public debt will be serviced in timely manner. He announced the payments of the “old” foreign currency savings will begin as of May 31, and reiterated the depositors of Jugobanka Bank from Kosovska Mitrovica will be paid for this and previous years.

Finance Minister also pointed out that on March 3, 2004 the new Government found €212 million in the budget,
€202 million of which on the account of National Bank of Serbia from the privatisation of companies. Of this sum €160 million can be used for the budget, while €42 belongs to Restitution Fund, the Minister said and added that the remaining €10 million (736 million dinars) were found in the budget itself.