DINKIC: Soon revision, budget for 2013 and VAT increase to 20%

(Mladjan Dinkic)

Minister of Finance and Economy Mladjan Dinkic stated Wednesday that preparations were underway to revise the current budget as well as to adopt a budget for 2013, it was announced on the government's website.

Speaking to journalists who report on economic trends in Serbia, Dinkic said that a change in the VAT rate was being prepared, noting that it would not exceed 20% and that VAT on essential foodstuffs would remain at 8%.

The Minister observed that the final decision on VAT increase would be made as soon as the expenses in the budget were reviewed.

He said that preparations were also underway to adopt a set of measures in terms of both budget expenses and revenues, which would be in the form of 17 laws.

These bills, he announced, will be forwarded to the Serbian parliament in September, while the largest portion of measures will be enforced in October.

Dinkic noted that the effects of those measures would not be felt in 2012, but at the beginning of 2013 at earliest.

He underlined that urgent anti-crisis measures would be adopted as soon as possible, specifying that those would include certain tax reliefs for companies and refunds of the costs for fuel, fertilisers and seed material.

Talks about allocation of €2 billion to Serbia underway

He reiterated that talks about allocation of around €2 billion to Serbia were underway and announced the arrival of an IMF delegation with which Serbian representatives would talk about a completely new arrangement.

The Minister explained that he had called the IMF to Serbia because the previous talks with them had indicated that the frozen precautionary arrangement with Serbia would have no effect, therefore a completely new arrangement should be agreed upon.

- We are negotiating liquid funds that will secure regular pensions and salaries - he stressed, adding that those were the funds from foreign sources.

- The above-mentioned €2 billion are linked to the capital market only in its minor part, which means that the smaller portion will be the state’s debt based on the issue of securities.