After the aid of 100 euros to citizens, comes a new measure from the Government of Serbia

Money, dinars, Photo: Shutterstock

After two packages of measures to support the economy that Government of Serbia brought in April and August, it seems that one of the worst affected sectors, could get additional relief.

The state could now return to seek new support, but this time it is not about the citizens who received it 100 euros. Not all entrepreneurs are in question, but those who suffer the greatest consequences.

In other words, the Ministry of Commerce, Tourism and Telecommunications has launched an initiative to reduce VAT in catering, in the provision of food services, from 20 to 10 percent.

Tax reduction, which actually represents the introduction of the so-called kovid-19 VAT, according to line minister Tatjana Matić, is proposed following the example of most European countries and should mitigate the hit that tourism has suffered due to the pandemic.

And that, according to those informed, would be a success at a time when a good part of the Serbian catering is almost on its feet.

The Minister also mentioned another proposal, which implies that National Bank of Serbia consider the possibility of extending the moratorium on loans to entrepreneurs in this sector.

That would be practically the third moratorium since the beginning of the pandemic, since both citizens and the economy had the opportunity to stop the payment of the war on two occasions. For the first time, banks offered this option to clients in late March for three months, while an additional two-month moratorium was offered at the end of July.

In the first round, more than 90 percent of loan users used this opportunity, while in the second round, slightly fewer clients did.

Given the new wave of the crown, which for tourism workers and caterers means another period without guests and especially without foreign tourists, an additional break in loan repayments would certainly be significant for many companies.

Bank, ATM, photo: Shutterstock

Employers to cut taxes

And the reduction of VAT is not the first time the issue.

From the very beginning of the pandemic, businessmen demanded a reduction or exemption from taxes and contributions, and businessmen stated that in the current situation it would mean a postponement of the payment of VAT or income tax. Such a proposal was heard during the negotiations on the amount of the minimum wage in the next year.

They also welcomed the moratorium on loan repayment.

Nebojsa Atanackovic of the Serbian Employers’ Union stated on several occasions that by reducing their obligations, employers would be in a position to pay excess funds as net pay.

– We ask that the government not be allowed to have different relations with different subjects of the economy, that is, that the support measures in the current emergency situation be applied equally to all. We also demand that the economy be released from some obligations, payment of VAT or income tax – said Atanackovic.

However, there were different opinions. Thus, a member of the Fiscal Council and tax expert Nikola Altiparmakov stated at the end of July that a possible reduction of the value added tax (VAT) on services in the tourism and catering sector, from 20 to 10 percent, would be a “lost measure” to help these companies. COVID-19 pandemic.

– Reducing VAT on services provided in tourism and catering at a time when there are no guests can not help companies in that sector to increase revenue – said Altiparmakov.

Since VAT is included in the final price of products and services, the question is whether this will mean benefits for consumers, that is, guests in cafes and restaurants.

Two packages of measures for the economy

Since the beginning of the pandemic, the Serbian government has adopted various packages of measures to support the economy. The first package was “heavy” at 5.1 billion euros, or 608.3 billion dinars. That represents half of our annual budget, that is, 11 percent of Serbia’s GDP, declared Finance Minister Siniša Mali at the presentation of these measures on April 1.

The first set of measures in this package referred to tax deductions, that is, the deferral of payment of tax obligations owed, with subsequent repayment in installments.

The second set involved direct payments to companies through the payment of three minimum wages.

The third set of measures aimed to preserve the liquidity of economic entities in the expected economic crisis during and after the end of the emergency situation, while the fourth set referred to the payment of direct aid worth 100 euros in dinars. to all adult citizens of Serbia.

At the end of July, the second package of aid to the economy was presented, with the aim of alleviating the economic consequences caused by the onset of the crisis, worth 66,000 million dinars.

That package included the payment of 60 percent of the minimum wage twice, as well as the deferral of taxes and contributions on wages for one month.