Law on abolishing tax on salaries and wages fund comes into force

The Serbian Ministry of Finance stated that the Law on abolishing a 3.5 percent tax on the salaries and wages fund will come into force today, and thus relieve the economy of more than 7 billion dinars by the end of the year.

The law will enable companies to make new investments or raise salaries, depending on the company’s business policy. Private employers will decide for themselves how to use this additional funds, while public companies will have to use them for new investments, read a statement.

The adoption of the law on social security contributions, which is currently debated in the parliament, will allow for additional disburdening of highly productive industries, such as textile, leather and footwear, for approximately 20 to 30 percent.

This law will abolish multiple bases for the calculation of contributions that have been used so far, and introduce a single minimum basis, worth 40 percent of the average gross salary paid in the previous quarter. In this way, contributions will be calculated against the real amount of salaries, and not against fictive bases, as it has been the case so far.