Government gave up solidarity tax?

Daily newspapers "Politika" and "Blic" announced in their today’s issues (March 30, 2009) that the Government of Serbia had given up “solidarity” taxation of citizens, and that it would try to reduce expenses by dismissin surplus manpower in the government sector.

According to “Politika”, the Government of Serbia has given up introduction of new tax of 6% on salaries, pensions and all other incomes larger than 12,000 RSD.

That newspaper announced that the Government would inform the International Monetary Fund that the analyses showed that that measure, although it had been agreed with IMF, was socially insustainable.

Both “Politika” and “Blic” announced that the Prime Minister of Serbia, Mirko Cvetković, and the Deputy Prime Minister and the Minister of Economy, Mlađan Dinkić, had agreed on that, as well as that they had informed the Governor of the National Bank, Radovan Jelašić, on their decision.

"Blic" also wrote that the President of Serbia, Boris Tadić, was familiar with that agreement.

According to that newspaper, "instead of tax of 6% on all incomes larger than 12,000 RSD, the idea is that the tax be introduced only for the employees in government administration and public companies whose salaries exceed the Republic average of 31,121 RSD, that the surplus manpower in the Government and complete government administration be dismissed, as well as that the managerial costs in public companies be additionally reduced".

Politika also announced that "we can expect dismissal of surplus manpower at all levels of government administration, including local management and public companies".

"These measures are not going to be applied to the sectors of health care and education, while serious rationalization reforms will be introduced in public services at once", Politika announced.