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The Government of the Republic of Serbia

In the service of citizens

Serbian parliament passes accompanying budget laws

Belgrade, 21 January 2009

The Serbian parliament today passed a set of accompanying budget laws according to which part of the budget revenues will be secured.

MPs also approved amendments to the excise law, the law on administrative taxes, property tax and contributions to the obligatory social and pension insurance fund.

The law on temporary income tax exemption, applicable to certain categories of income, including interest on foreign currency savings, was also passed.

According to amendments to the excise law the excise duty on oil derivates, cigarettes and beer has been increased.

Excise duty and taxes are being increased to adjust the decrease in revenues caused by a lower than expected rate of economic growth and a decrease in revenues from customs duty caused by the implementation of the transitional trade agreement with the EU.

Besides the regular adjustment to the inflation rate, the excise duty on diesel fuel will be increased by RSD 9 and will be RSD 26 per litre. The excise duty on petrol will be increased from RSD 27.5 to RSD 42 per litre and the excise duty on liquefied petroleum gas will be RSD 13 per kilogram.

The law changes the method of payment of the excise duty on cigarettes, making it equal for domestic and foreign brands. By the end of the year the excise duty on one packet of cigarettes will be RSD 11 and will increase during the next few years.

The basis for the excise duty on cigarettes on a 35% rate will be the retail price of one packet, and the excise duty on cigarettes and cigars will be RSD 14.5 per item. The excise duty on beer has been increased from RSD 9 to RSD 15 per litre.

According to amendments to the law on state administrative taxes, new taxes are envisaged in areas which were under the jurisdiction of the former state union of Serbia and Montenegro and these include consular taxes, taxes on the issuance of travel documents, intellectual property rights and taxes related to the law on citizenship.

Churches and registered religious groups will be exempt from taxes.

According to the law on pension and disability insurance pensions will be frozen for 2009 but regular annual adjustments will be made. The level of pensions was established in October 2008 with a 10% increase and this will be the basis of pension payments to some 1,300,000 pensioners.

According to the amendments to the law on property tax, taxes will be paid on immovable assets in cases of ownership rights, leasing rights and using city building land but no taxes will be payable on tenant rights and property time-sharing.

Property tax will also be payable on using state, autonomous province and local self-government property and facilities primarily intended for agricultural use.