Serbia's planned tax hikes to add EUR 514mn to 2013 budget revenue - economists.

By bne IntelliNews August 13, 2012
Serb economists estimate that the state budget could receive an additional influx of RSD 60bn (EUR 514mn) next year thanks to planned hikes in several tax laws, including VAT, daily Blic reported. If all goes as planned, the finance ministry could raise as of October 1 the 18% VAT rate to 20%, while the lower 8% rate on basic food products and public utility services will remain unchanged. According to the report, Serbia's new Socialist-led government also plans to hike profit tax to 15% from current 10%, as well as raise excise taxes on cigarettes, alcohol and petroleum products. According to economist Miroslav Zdravkovic, the planned 2pps VAT hike would have a direct impact of 0.6-0.7% on inflation. The increase in the profit tax plus the gradual removal of the abundant exemptions and benefits could bring in some RSD 25bn in 2013, the economists project.Tthe same amount could be attracted via the VAT hike, while the increased revenue from excise taxes could result in around RSD 10bn. At present, there are still uncertainties around the changes in the income tax, which have been announced but no certain decision has been yet taken. According to the report, one of the options could include the introduction of a steeper rate in the income tax progressivity.
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