Second phase of the tax reform

On the occasion of his visit to Kragujevac, within the framework of the Tax Campaign, Serbian Finance Minister, Mr. Bozidar Djelic said to the local businessmen, that the fiscal system would become even more stimulating, and noted the reduction of the profit tax rates as an example.

Namely, Mr. Djelic announced last Thursday the reduction of a certain number of tax rates, as well as certain stimulating measures, aimed at increasing investment and employment. He also announced the reform of the Revenue Services Agency, which is to be carried out by the end of the year.

– We will insist on the increase of stimulations on investment and employment, and this is something we will carry out in the following months, said Djelic, and added that the Ministry of Finance has already begun receiving donations for that particular purpose.

Besides the reduction of tax rates, the second phase of tax reforms will be oriented in three directions – towards the intensifying of penal policy against tax evasion as well as in the fight and prevention of the gray economy, the establishment of the most attractive tax and revenue system in the South-Eastern Europe, and towards a deep reform of the Revenue Services Agency.

– Tax evasion will become one of the major criminal offences in our country as well, and everyone will have to pay taxes. In the meantime we will continue to fight the gray economy, by offering a number of stimulating benefits to those who are doing business legally, said Djelic.

– Deep reform of the Revenue Services Agency and the suspension of the Payment and Settlement Institute by January 3, 2003 represent the third step in the overall tax reform. This is all even more important, knowing that 50% of all taxes in Serbia have been collected under force. The Payment and Settlement Institute suspension and the deeper reform of the Revenue Services Agency are aimed at assuring a more efficient tax collection process. By the middle of the coming year, all businessmen will feel that this country is working in a better way, emphasized the Republic Finance Minister.

The Minister qualified the reform already carried out as successful, and stated that this reform raised all tax duties to a legal level. In the meantime, for the first time in the past 12 years, all the budgetary revenues were real, while expenditures were a little superior, but a balance between the revenues and the expenditures sides of the budget was established.

Announcing the continuation of the fight against smuggling – especially tobacco smuggling – Djelic pointed out that one tobacco factory will be located in Kragujevac. The tobacco factory building will follow the privatization process of the tobacco industries in Nis and Vranje.