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The Government of the Republic of Serbia

In the service of citizens

Budget bill aims to secure macro economic stability

Belgrade, 14 June 2007

Serbian Minister of Finance Mirko Cvetkovic said that the Bill on 2007 budget adopted by the government today envisages revenues of RSD 582 billion and expenditures of RSD 595.5 billion.

Mirko Cvetkovic

Cvetkovic explained at a press conference held after the government session that according to this bill, the budgetary deficit will be RSD 13.7 billion, which is 0.6% of GDP.

He said that the estimated tax revenues for this year are RSD 517 billion, while non-tax revenues are RSD 65 billion.

The Minister said that with the adoption of this bill, the conditions are being created for termination of the interim financing and voiced hope that Serbian parliament will adopt it by late June so that it could be enforced as of July 1.

Cvetkovic said that the aim of this budget is to secure macro economic stability and dynamic economic growth and thus to increase employment and living standards.

He said that the envisaged transfers to the organisations of obligatory social insurance are RSD 147.7 billion, which is 14% more than in 2006.

Estimated funds for the National Investment Plan (NIP) are RSD 44.4 billion, which is 7.5% of the total budgetary expenditures, and those funds are approximately five times higher than last year when NIP's implementation began.

The Minister said that the payment of the public debt in the amount of RSD 42 billion is planned for this year, half of which is the payment of old foreign currency savings.

At its session today, the government also adopted some laws that support the budget and these are the Bill on amendments to the Law on tax procedure and tax administration, as well as the Bill on amendments to the Law on property tax.

The government also adopted the Bill on amendments to the Law on Value Added Tax, the Law on excise tax and the Law on customs tariff.

Predrag Bubalo

Speaking about amendments to the Law on property tax, Cvetkovic said that the tax on transfer of absolute rights will be reduced from 5% to 2.5%, adding that this measure will not be applied only on the first apartment bought, but on all apartments bought.

Cvetkovic said that the Ministry of Finance will tomorrow hold a press conference at which it will present the Draft law on budget.

Serbian Minister of Economy Predrag Bubalo said that it is very important that the government decided today to set up the Committee for Restructuring and Privatisation of Public Companies since it is necessary to conduct this process quickly. He said that the chairman of the Committee will be Serbian Deputy Prime Minister Bozidar Djelic.

Velimir Ilic

He said that the government also brought a Decision on the need to adopt a platform for negotiations with representatives of the Russian Federation in the field of the economy and energy, and a Decision to set up a working group for joint projects in these fields.

Serbian Minister of Infrastructure Velimir Ilic said that the government today set aside RSD 20 million for the clean-up of consequences of the explosion in Paracin, RSD 10 million for completion of renovation of houses in Cuprija, destroyed in an explosion and some funds for the Valjevo municipality, recently hit by floods.