Investment and employment stimulation

Serbian Finance Minister, Mr. Bozidar Djelic, has already visited eight cities over Serbia, within the campaign “Taxes are the first step – It all depends on you”. According to the Minister, Serbian tax rate on corporate profit is among the lowest ones, and it will be additionally reduced from 20% to 15% during the next year, within the overall reforms.

– This is the moment for our companies to make the maximal investments into their basic resources. That is the reason why this measure won’t remain an isolated step – it will be followed and supported by measures stimulating investment and employment, because these are the two major problems we are facing today, going through the transition process. We will provide with the new tax stimulations for investment and for the employment of new workers.

Djelic also emphasized that the new Law on Tax Administration is in the final draft phase, and that its major purpose will be the gray economy wiping out. This new Law provides for more important fines for tax evasion, which will enable us to clearly see who is ready to do business legally and who is not. It is also foreseen, for the next 18 months, to carry out a thorough and deep reform of the tax proceedings and tax administration.

– As of January next year, ZOP (the Accountancy and Payment Institute) will be suspended, and we will fully pass to a market economy – where there won’t be any administrative prevention control, and the ZOP infrastructure will be integrated to the tax administration, explained Mr. Djelic.

– We are leaving a period of chaos, where some enjoyed special privileges – our citizens demanded adequate sanctions for them. The Law on Extra Profit is unfortunately one of the rare steps having positive results, but this is a single-step law, and it should be suspended eventually, said Djelic.

If this law were still in effect, the investors would be afraid of a possible risk that a new tax claim from the public institutions might come up, beyond the usual tax proceedings.

– We do not need that. The Government positively agreed that one couldn’t be automatically suspected just for having more money. The great majority of our businessmen earned their money legally. They don’t have to worry about further investigations on the origin of their funds, if they do not reinvest them in their companies or new business, added Djelic.

The Finance Minister also announced the upcoming “time to fight tax evasion”. – The purpose of this action won’t be the obligation for the Tax administration to knock on every businessman door all over the country. That would make us a police regime, but we this Law, will provide the Tax Administration with tools to compare the tax payer’s “lifestyle” with its property, and thus determine the real amount of the legally declared different revenue types. If a greater gap is noticed, the Tax Administration will act – said Djelic, adding that this law is applicable to all those who were not included in latest Law on Extra Profit, which is based on the official documentation insight, meaning “all those who won’t be able to explain the origin of their money”.

“Within the Government, there is no discord on this principle”, said Djelic. He emphasized that adequate instruments and legal regulations will now exist, and that people will have to declare all their revenues. “On the other hand, this won’t mean that one should expect that everyone working in this country will be examined”. – This is not necessary, nor fair, knowing the system we just emerged from, added Djelic.