New investment opportunities in Serbia

– New investment opportunities have been emerging in Serbia, because of the fact that it will soon be bordering the European Union – once Hungary becomes a Union permanent member in 2004 – declared, inter alia, Mr. Bozidar Djelic, Minister of Finance and economy, on the occasion of a lecture on fiscal system reforms in Serbia, taking place on the second international finance fair “Finmar” in Novi Sad.

According to his terms, after becoming a EU member, Hungary will no longer be able to offer stimulations for investment, and therefore, Serbia can take that role – after assuring all the necessary attractiveness for investment.

This year’s investment level in Serbia amounts 600 million dollars, while a billion dollars of investments are expected for the following year, with a five percent growth level and a single-digit inflation rate. The next year’s priorities are focused on the rationalization of public expenditures – especially in the domain of Republic and Federal administration, as well as the fight against the gray economy – which, at present, amounts 35-40 percent of the Gross National Revenue.

– The Finance ministry’s goal is to establish the most attractive fiscal system among all transition countries. Still, the negative demographic picture of Serbia makes it quite difficult to realize. The inactive population in Serbia is greater than the active population – there are more pensioners than actively employed individuals, and this represents one of the most negative demographic pictures in Europe, picture that won’t be modified that rapidly.

Minister Djelic reminded that we are the only European country where the minimal “consumers basket” is fully tax-exempted, adding that last year, sales taxes had been suspended for meat, vegetables, fruit, eggs, but also medicines from the positive list, as well as the public utilities, and that the tax suspension is to be expected for sugar and the cooking oil and grease.

According to the minister’s opinion, the reforms wheel is not moving as rapidly as everyone of us is expecting, but things are improving in Serbia, especially in Vojvodina. During the first nine months, Vojvodina recorded 25 percent more exportations than last year, while Serbia made 19 percent more.

– Within a few months, Vojvodina will be bordering the European Union, because Hungary will become it’s member country – said Mr. Djelic, and called ignorant, all those who claim that foreigners “plucked” the Hungarian economy. Mr. Djelic exposed data showing that last year Hungary joined the circle of 30 richest countries in the world, realizing 38 billion dollars exportations income (19 times more than our actual exportations level). Explaining that Serbia will never be a fiscal paradise, because it is “neither democratic, nor healthy for the economy of a serious country”, Mr. Djelic announced the intensification of the tax payment enforcement regarding the income tax for citizens, in order to avoid the “last year’s joke, when only 2.380 citizens declared their income”.

– Simultaneously, companies located in communes of special interest will be tax-exempted for a 10 years period if they invest 10 million Euros and employ at least 100 new workers, said Mr. Djelic, adding that the new economic reform and the new fiscal policy, we cannot be called losers, because we already started from zero.