Slavica Savicic, State Secretary of the Ministry of Finance of the Government of the Republic of Serbia, said that the amendments to the Law on Personal Income Tax, which are being prepared, had been discussed with the entire business community and that they applied to everyone, not just the IT community.

Ms. Savicic, who appeared on Radio and Television of Serbia (RTS), said that the new legal solutions would lead to new employment.

She said that representatives of the Ministry had communicated with everyone interested in those types of measures and incentives, adding that it was good that there were differing opinions in the process.

The measure, she underlined, was expected to generate a lot of employment results, while more than 8,000 individuals were expected to use it.

According to her, the measures mostly relate to those who graduated from colleges and secondary schools, or to all those who did not work this year.

The idea is to get them employed over the next year, while their employers would, thus, be able to benefit from this. The proposal is to exempt the employers from income taxes by 70 percent in the first year, by 65 percent in the second year and by 60 percent in the last year, the Secretary of State said.  

The plan is to fully release them from Pension and Disability Insurance contributions in the first year, by 95 percent in the following year and by 85 percent in the third year.  

The measures apply to those who did not have employee status this year, or did not have employee insurance status. If they are hired by the end of April 2020, then they will be entitled to incentives, Ms. Savicic specified.

The second category includes young people who will finish school by the end of the year, are not employed and are not entrepreneurs in the first four months of next year. They, if hired by the end of next year, will also be entitled to incentives, she added.

The envisaged measure, as she stated, is related to a person, to an individual.  If that individual changes jobs over the next three years, any employer who hires him/her will be entitled to incentives.

The State Secretary noted that the experience of the environment was also taken into account in the analysis of the situation in the field, but that legislators made an effort to do something different and more favorable to us.

Ms. Savicic recalled that it was observed in the field that entrepreneurs were engaged in the business process for the jobs that should be carried out by full-time employees, and thus avoided paying higher taxes. 

Therefore, as she stated, the independence test was introduced, which would contain nine criteria that would check the independence of the entrepreneur in relation to the client.

The State Secretary specified that the measure would last for three years, and that the tax exemption and contribution benefits would apply to every newly employed person.

Amendments to the Law on Personal Income Tax, which should encourage new employment, are being prepared and, upon being adopted by the Government, would be forwarded to the Serbian Parliament.

Source: Business Morning and Coordination Body