Citizens "to receive reward for sacrifice" - minister

Higher budget revenues will be the main effect of the new 7.5 percent excise duty on electricity, Serbian Finance Minister Dusan Vujovic said Monday.

Source: Tanjug

By imposing excise duty on electricity, the government is introducing another steady source of budget revenue that will allow it to accomplish its long-term objectives in years to come, said Vujovic, presenting his proposal for amendments to the excise tax law in the Serbian parliament.

He explained that these objectives are "to return all income paid from the budget, and that means salaries and pensions, to the level of the trend."

The minister then reassured citizens that their sacrifice would be rewarded:

"After the adjustments that we have had since October of last year, that means citizens will receive reward for their sacrifice."

Noting that this is the first time for Serbia to impose excise duty on electricity, he added that it is being done in accordance with the EU directive and with an aim to gradually align excise tax rates with the EU policy, as well as to bring the electricity prices in Serbia closer to those in the region.

The cost of electricity in Serbia is RSD 4.97 per kilowatt hour, plus RSD 1.06 in tax, and after imposing excise duty, the price will still be lower by 25 percent compared to Bosnia-Herzegovina and Montenegro.

The minister explained that after the 12 percent price hike, which includes the excise duty of 7.5 percent, an average electricity bill of RSD 2,000 will go up by RSD 325.

The proposed amendments also envisage the introduction of excise duties on e-liquids, which will stand at four dinars per milliliter, and on smokeless tobacco.

Vujovic also said on Monday that the first review of the precautionary arrangement with the International Monetary Fund (IMF) will be approved to Serbia.

Vujovic told MPs that the government leared on Friday that the report on the realization of its program, which received the institution's backing, will go through on June 26, without any discussion.

Underscoring that the IMF is satisfied with Serbia's results, Vujovic said that the program contains a host of tough measures that the government should put in place.

The agreement with the IMF on the first review of the arrangement was reached in May on condition that Serbia raises the price of electricity and privatizes restructuring enterprises, but the institution allowed the country to protect a small number of companies from lenders.

When the IMF Board of Directors confirms the reached agreement, Serbia will have 146 million at its disposal out of the total of EUR 1.2 billion made available through the stand-by arrangement.

According to the government's announcements, Serbia has no intention of using the granted funds at the moment.

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