Solidarity tax scrapped, but public sector pay cut remains

BELGRADE -- Finance Minister Lazar Krstić said Monday that the solidarity tax will be scrapped as of July 1, but that public sector salaries will be reduced by ten percent.

(Beta, file)
(Beta, file)

The minimum wage will remain exempt, he said.

By the year's end, pay grades will be introduced in the public administration so as to equate salaries for the same kind and quality of work, Krstić said, noting that this will bring about savings of around RSD 20 billion in total.

The first reform bills will be pending for adoption in the Serbian parliament in May and June, including a budget review, Krstić said in a live broadcast on Belgrade-based TV Pink.

The finance minister underlined that the new government's objective is to make spending cuts and trim the budget deficit so as to consolidate the budget.

In the next six months, the government will try to "fill the hole in the budget", in a way that will not affect citizens directly, he said.

In several days' time, the Serbian parliament will ratify the loan agreement with the United Arab Emirates, and these funds from the agreement will cover the budget deficit, he noted.

At the end of the year, Serbia will for the first time have a program budget so as to establish full control over money, and if it manages to achieve that, the country could have the planned budget deficit as soon as next year, Krstić said.