The Serbian economy will feel the crisis in the second half of the year and at the beginning of next year

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The coordinator of the Business Support Network in Serbia, Dragoljub Rajic, said that the crisis in the economy, after the pandemic of the COVID-19 virus, will be felt at the end of this year, and especially at the beginning of next year, when deferred taxes and salary contributions arrive.
He assessed that the real situation in the economy will be seen next month and whether there are any hints of a recovery in domestic and world demand.
In the package of assistance to the economy, the Government of Serbia has postponed taxes and contributions on the salaries of employees for this year until January 1, 2021, when they will pay them in 24 installments.
“In Eastern European countries, taxes and contributions are up to 40 percent lower than in Serbia. “In Croatia, they are 51 percent, and in Serbia, they are about 61 percent of the net salary, because the public sector that the economy supports, is too big,” said Rajić.
He added that the crisis will be felt differently by certain sectors and that it will be more difficult than in countries where a state of emergency and limited movement have not been introduced.
According to him, companies engaged in the production of railway parts in Slovenia, during the health crisis, had a drop in income of eight to 15 percent, in Croatia from 12 to 20 percent, and in Serbia from 22 to 50 percent.
“Due to the state of emergency, there were problems in Serbia with the provision of movement permits and equipment for safe work, and that affected the decline in production and income,” said Rajic.
He pointed out that the tax reform in Serbia was not done on time and the parafiscal levies were reduced, and that is why the economy will find it harder to bear the crisis.
The anomaly of the Serbian tax system, as he said, is that the profit tax is paid in advance and businessmen have to pay it in advance, without knowing whether they will realize it, especially this year.
“The state demands that companies be disciplined towards it and settle their obligations on time, regardless of the fact that they collect the goods themselves after 130-140 days,” said Rajic.
He added that exporting companies will now have longer payment deadlines, that “there is no money that can finance jobs in the long run” if there is no work, and that in that case they will resort to reducing costs through layoffs.
As he said, the domestic economy will recover from this crisis longer than the economies of other countries, as well as after the crisis in 2008, when European companies stepped on the “green branch” after three or four years, and the domestic ones took six or seven years.
“Europe, in response to the crisis, introduced the principle of localism, which means that it will procure everything from the immediate environment. “Croatia and Bulgaria have introduced the rule that more than half of the consumer goods are of domestic origin, and all that will affect Serbian exports as well,” Rajic said, Danas reports.

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