Dragutinovic: Agreement reached for tax reforms

Belgrade/ Zagreb, May, 19. 2010 (Serbia Today) - An agreement has been reached within the Serbian government for the needed tax reforms, said finance minister Diana Dragutinović on Saturday. She said that the contents of the reforms have not been finalized, but that there will be no increases on Value Added Taxes (VATs).  While attending the EBRD conference in Zagreb, Dragutinović said that the reforms are expected to decrease the number of products that are being taxed by the lower VAT rate of eight percent.  She said that these products make up 40 percent of production, and a normal percentage rate for such products would be about 10 to 15 percent.  The high level VAT rate in Serbia is 18 percent.  Dragutinović said that the tax reforms do not aim to cause loss of taxation income and stressed that the reforms are needed in the transition to a new model of economic growth, based on exports.  She said that the “Greek crisis scenario” is not threatening Serbia, since Serbia’s public debt is at about 30 percent of the gross domestic product, and the budget deficit is four percent.