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The Government of the Republic of Serbia

In the service of citizens

This year's budgetary deficit lower than planned

Belgrade, 14 June 2007

Serbian Minister of Finance Mirko Cvetkovic said that deficit in the state budget will be approximately 0.5% of GDP, while the regular budgetary revenues, without privatisation proceeds, are estimated to be RSD 581 billion.

Mirko Cvetkovic

Author: Tanjug

In an interview given to today's issue of Glas javnosti daily, Cvetkovic said that the main goal this year is to make a balance between revenues and expenditures, not to increase demand and thus harm the achieved macro economic stability.

Speaking about salaries in the public sector, the Minister specified that one fourth of the budget is set aside for them since they have been increased by 22-23 percent on average in relation to last year. Only for that purpose, RSD 28 billion more will be set aside this year than in 2006.

For the National Investment Plan (NIP), which has been included in the budget and which will be financed from regular revenues, RSD 40 billion has been set aside, while 7% of the republic budget will be set aside for Vojvodina budget, Cvetkovic said. Last year, RSD 26 billion were set aside last year for Vojvodina, while this year that province will receive over RSD 40 billion.

RSD 16 billion will be earmarked for the Serbian Institute for Health Insurance.

Speaking about subsidies reduction, Cvetkovic said that the Fund for subsidies is decreasing its funds because the number of socially-owned companies that are not privatised is dropping.

Cvetkovic said that major problems are the Bor mining and metallurgical complex RTB Bor and Zastava from Kragujevac. The largest amount of money goes for the salaries for Zastava's company "Zastava Employment and Education", which employs 4,500 workers.

The monthly fund for that part of Zastava is €1 million, it &euro¡12 million per year, which is a huge budgetary expenditure. That is why the Serbian Ministry of Economy and Regional Development and the Ministry of Finance agreed to offer a social welfare programme to this company, for which RSD 1.5 billion has been set aside in this year's budget.

Cvetkovic said that legal regulations in the field of taxes will be changed in order to reduce the possibilities for employers to avoid paying taxes.

He added that when buying the first apartment, the tax on transfer of absolute rights, will not be paid in case of old apartments, as well as the value added tax of 8% when buying a new flat.

Also, the tax on transfer of absolute rights will be reduced from 5% to 2.5%.