The Serbian IT Association (SITA), representing over 20 tech companies employing more than 4,700 IT professionals in Serbia, has voiced strong concerns about the Serbian government’s recent decision to cancel the Regulation on incentives for employers who hire newly settled persons.
SITA highlighted that this decision was made without consulting the IT sector or the broader business community. The incentives had previously encouraged both domestic and foreign companies to expand operations in Serbia, positioning the country as a regional IT hub. Many companies had hired highly skilled foreign professionals based on these incentives, aligning their investments and hiring plans accordingly.
The abrupt cancellation, without a transition period or prior notice, disrupts business plans, undermines predictability, and sends a negative signal to investors about Serbia’s business environment stability. SITA warns that this move could lead to stagnation or even decline in IT service exports and slow progress in digitalization and artificial intelligence development.
The association is calling for urgent dialogue with government representatives to establish transitional measures and protect companies that have already invested under the existing rules. They also urge the creation of a long-term, transparent incentive system to foster sustainable growth of Serbia’s tech sector.
Additionally, SITA demands prompt payment of funds owed under the canceled Regulation for the period September 2023 to August 2024. They warn that sudden policy changes risk pushing IT talent out of Serbia and could force companies to reconsider their future plans in the country.
SITA emphasizes that its members generate over €375 million in revenue annually, with nearly €290 million from service exports. The association remains committed to improving Serbia’s regulatory framework, developing local talent, and creating a business climate that attracts investment and supports domestic IT professionals.
The government’s move follows concerns over the rising number of subsidy applications and new residents benefiting from the incentives, complicating budget planning for future years. However, employers can still access tax benefits related to hiring newly settled persons under the Law on Income Tax.
