Small, medium businesses struggling
Economists think that small and medium businesses are Serbia’s development chance, but not everything goes according to plans and projections.
Sunday, 14.11.2010.
16:57
Economists think that small and medium businesses are Serbia’s development chance, but not everything goes according to plans and projections. Small and medium businesses are practically the most numerous firms in every European country and a large part of economy is based on them. These businesses easily adjust to changes and adopt technological novelties. Small, medium businesses struggling About 20 business close down every day in Serbia. Number of closed businesses has been much higher than the number of ones that open in the past several months. There are two main reasons for that – crisis which is not subsiding and high taxes. “Costs of doing business are enormous. When you have some firm or a store, you have so much to pay to the state that nothing’s left for you. And then the old people retire, close their shops because they can’t stand the tempo anymore. And new ones that open up, that’s only formally, just to apply for something else,” said Deputy President of the Association of Small and Medium Businesses of Serbia Dragomir Rakic. The question is can the state improve business climate for entrepreneurs and therefore eliminate possible social problems in advance. “In crisis, when you have to adjust and simplify some things, you should also cheapen some taxes. It’s a very wrong way to fill up deficit in the state budget by increasing taxes and that never happens. Because if small and medium business shut down I’m afraid that the state will have even more problems with financing in the future,” Director of the Institute of Economic Sciences Dejan Eric explained. But business reality is often more complex than the statistics shows. “A tendency has been noticed that many firms that open, practically every other, either has none or only one employee. In other words many of those firms are being opened so some other firms which are insolvent or in problems could try to transfer some part of their property or some financial funds before they close down or go bankrupt. So this statistics, it’s questionable how well it actually reflects a real situation,” says Dragoljub Rajic of the Serbian Association of Employers. Another indicator that situation is not so great is the fact that only 10.45 percent of small and medium businesses pay salaries on time and about 15 percent of them pay salaries after a three-month delay or more.
Small, medium businesses struggling
About 20 business close down every day in Serbia. Number of closed businesses has been much higher than the number of ones that open in the past several months.There are two main reasons for that – crisis which is not subsiding and high taxes.
“Costs of doing business are enormous. When you have some firm or a store, you have so much to pay to the state that nothing’s left for you. And then the old people retire, close their shops because they can’t stand the tempo anymore. And new ones that open up, that’s only formally, just to apply for something else,” said Deputy President of the Association of Small and Medium Businesses of Serbia Dragomir Rakić.
The question is can the state improve business climate for entrepreneurs and therefore eliminate possible social problems in advance.
“In crisis, when you have to adjust and simplify some things, you should also cheapen some taxes. It’s a very wrong way to fill up deficit in the state budget by increasing taxes and that never happens. Because if small and medium business shut down I’m afraid that the state will have even more problems with financing in the future,” Director of the Institute of Economic Sciences Dejan Erić explained.
But business reality is often more complex than the statistics shows.
“A tendency has been noticed that many firms that open, practically every other, either has none or only one employee. In other words many of those firms are being opened so some other firms which are insolvent or in problems could try to transfer some part of their property or some financial funds before they close down or go bankrupt. So this statistics, it’s questionable how well it actually reflects a real situation,” says Dragoljub Rajić of the Serbian Association of Employers.
Another indicator that situation is not so great is the fact that only 10.45 percent of small and medium businesses pay salaries on time and about 15 percent of them pay salaries after a three-month delay or more.
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