MALI: Salary and pension raises possible even without budget rebalance

Serbian Minister of Finance Sinisa Mali has stated that an exact calculation regarding pension and salary raises in the public sector will be made soon and added that, at the moment, the budget rebalance is not being considered, as pensions and salary raises can be realized within the current budget.

– We will abolish the Law on Temporary Reduction of Pensions, which means that, before the end of the year, most probably in November, pensions will be raised. The IMF Delegation arrives in the second half of September, and after these negotiations, which will not be easy, we will present concrete data – Mali said in his interview with Novosti, Tanjug reports.

He said that, in the first six months alone, the GDP had grown by 4.5%, the highest half-year growth rate in the past decade. The budget surplus amounted to RSD 49.1 billion, that is, around EUR 410 million, at the end of July, whereas a deficit of RSD 16.7 billion had been planned.

When asked whether the fiscal stability would be impacted by the simultaneous abolition of the Law on Temporary Reduction of Pension, the raising of pensions for those with the lowest earnings and the reduction of labor charges, Mali said that “we are all making efforts not to jeopardize the financial stability”.

– We’ve been building that stability for years and it would be very irresponsible to jeopardize it in any way. Thanks to the results, there’s room in the budget for the both the abolition of the Law on Temporary Reduction of Pensions and the raising of the lowest pensions – the minister said.

Mali also announced that the ban on employment in the public sector will be one of the topics in the talks with the IMF.

– However, although the ban is in effect, the government’s Commission for Consent takes care of priorities. People are employed in places where natural selection has taken effect, that is, people retiring, and where new employees are needed, such as kindergarten teachers and medical workers. The measures we are implementing are also aiming to further strengthen the private sector, which should support the growth and the development of the economy, which leads to new measures – Mali said.

Regarding the announced reform of the Tax Administration, Mali said that he would personally deal with all the aspects of the transformation and pointed out that the working group had been formed and that it met once a week.

When asked how he thinks the sector of medium enterprises might persevere and get stronger, Mali says that the data of the Business Registers Agency show that the number of registered companies is growing, which proves that the country is on the right path.

– In early July, there were 381,718 companies registered at the Business Registers Agency. The total number of business entities has grown by 2.66% in the past half a year and increased by 4.79% in a year – Mali said.

Discussing other concrete measures, Mali said that the aim is to facilitate operations for all business entities.

– We are planning a reduction of the VAT recovery period, which will improve the liquidity of the economy. We are also planning a reduction of fiscal charges on salaries, as well as the adoption of a special set of tax incentives to innovative activities. Furthermore, the system of E-government enables businessmen to avoid spending times in queues, thereby saving their time – Mali said.

Ministarstvo finansija Republike Srbije

Međunarodni monetarni fond - MMF Beograd

Agencija za privredne registre

Sinisa Mali

pension raises

salary raises in public sector

salary and pension raises

Law on Temporary Reduction of Pensions

IMF

growth of GDP of Serbia

ban on employment

Tax Administration reform

Business Registers Agency

VAT recovery

VAT recovery deadline

reduction of fiscal salary charges

tax incentives to innovative activities

E government