State Securities for Budget Financing Purposes as of September

The Minister of Finances Diana Dragutinović said that as of September this year, the state will initiate long term securities’ issuance for budget financing purposes, totaling approximately five billion Dinars.

The Minister explained that state securities will be indexed in Dinars exclusively and that they can be purchased by both natural and legal persons, and that their role will be in taking over excessive Dinar liquidity and in stimulation of home capital market developments.

Speaking of inflation and inflation-related curbing measures, she pointed out that the biggest influence on Serbia’s inflation have permanent global oil and food prices increases, and announced prospect of oil derivates’ excises reduction aimed at inflator shocks absorptions.

The Minister of Finances Diana Dragutinović said that as of September this year, the state will initiate long term securities’ issuance for budget financing purposes, totaling approximately five billion Dinars.

The Minister explained that state securities will be indexed in Dinars exclusively and that they can be purchased by both natural and legal persons, and that their role will be in taking over excessive Dinar liquidity and in stimulation of home capital market developments.

Speaking of inflation and inflation-related curbing measures, she pointed out that the biggest influence on Serbia’s inflation have permanent global oil and food prices increases, and announced prospect of oil derivates’ excises reduction aimed at inflator shocks absorptions.

She mentioned that according to one IMF study, more than 40 countries have already initiated excises reduction, and some of them have begun doing that at 100 Dollars per barrel price.

Referring to the question from what sources will funds for announced pensions’ increase of 10 percent be secured form, Dragutinović said that for that purposes from the Serbian budget additional eight to nine billion Dinars will needed to be secured.

At the same time she announced possibility of increased excises on tobacco, not because smoking is dangerous for people’s health, but also because our excises and cigarette prices are the lowest in Europe, whereat firstly arrangements with foreign companies participating in tobacco industry’s privatization will have to be reviewed.

Speaking on forthcoming tax system reform, Dragutinović estimated that budget revenues collection levels must be increased, and added that there is an idea to increase share of employees’ salaries that will be non-taxable, and to additionally reduce tax rates on salaries.

According to her, by introducing synthetical taxation on salary, the fact that persons with lower receiving should be less tax burdened would be recognized, while at the same time, numbers of tax payers would be increased.

Speaking on Tax Administration efficiency increase, she pointed out that she will firstly review where the biggest tax collection problems are, i.e. to determine where the biggest tax evasions are occurring.

Dragutinović said that on Friday, July 18, 2008, she will have a meeting with Tax Administration representatives to determine where biggest tax losses and evasions are happening.