State considering three options for earnings tax reduction

The Government of Serbia is considering a reduction of contributions paid by employers and employees, but also an increase in the non-taxable salary components, which now amount to RSD 15,000.

Finance Minister Sinisa Mali announced that the state would reduce the earnings tax from early 2019, thereby addressing the pleas that business people had been insisting on for over a decade. As Blic writes, the government has already formed a work group which has begun calculating by how much the earnings tax could be reduced and in which particular segments, and three options are being considered.

– We are currently considering all the potential aspects. Projections and calculations are being made regarding by how much it is possible to reduce individual charges. It is certain that there's a possibility for the contributions paid by the employee and those paid by the employer to be reduced, but non-taxable salary components can also be increased. Which part is to be reduced or increased and by how much depends on the budget. It is certain that there's room for a reduction, but we are calculating how much room there is in the budget for this – says the Blic source.

Salaries are currently “burdened” with 10% in taxes, but together with contributions for the pension, healthcare and unemployment insurance, the total charge reaches 64%, and economists project that there's room for the percentage to be reduced to 61 to 62% of the earnings.

Vlada Republike Srbije

Ministarstvo finansija Republike Srbije

Government of Serbia

earnings taxes and contributions

reduction of earnings taxes and contributions

increasing non taxable salary components

Ministry of Finance

salary

salaries

earnings

Sinisa Mali

tax charges for business people in Serbia

reduction of contributions paid by employers

reduction of contributions paid by employees