Serbia: Economic measures for mitigating the effects of the COVID-19 pandemic
COVID-19 has spread across the world and countries are faced with challenges and changes on both a social and economic level. The global economy expects significant losses over the coming month as countries plough resources into supporting workers, businesses and their respective economies during the pandemic. Many countries have already adopted specific economic measures, and international emergency funds have been set up. Serbia has adopted the following initial measures:- Moratorium on the repayment of loans provided by the National Bank of Serbia (NBS) – the moratorium will last for at least 90 days or as long as the state of emergency exists. During this period, banks are not allowed to calculate statutory interest or initiate any enforcement procedure or conduct any other legal actions toward debtors in pursuit of debt collection.
- Tax relief for debtors in enforced collection – in practical terms this means that, during the state of emergency, the Tax Administration will not ex officio annul the agreement. In other words, they will terminate the decision on the rescheduling of payment of the tax due and will not carry out the enforced collection procedure, without an interest being calculated within the stated period.
- Tax policy measures - the deadline for payment of income and contribution taxes for the private sector will be postponed for the duration of the state of emergency, for a period of at least 3 months. The subsequent repayment of incurred liabilities may be spread over 24 equal instalments beginning at the earliest January 2021. Additionally, the payment of income tax advance payments in the second quarter is delayed and donors will be exempt from VAT.
- Assistance to employees - assistance to flat-rate entrepreneurs who pay real income taxes, as well as to employees in micro, small and medium-sized enterprises in the private sector, is reflected in the payment of cash assistance in the amount of 3 minimum wages over the next 3 months. Large private sector companies will be paid 50 percent of the net minimum wage, for employees who were given the decision on cessation of work.
- Preservation of liquidity - 2.2 billion euros has been earmarked for liquidity preservation measures. These include the provision of cheap loans for maintaining liquidity and working capital for micro, small and medium-sized enterprises, entrepreneurs, agricultural holdings and cooperatives registered in the relevant registry, via a Development Fund as well as a Guarantee Scheme to support the economy during the Covid-19 crisis for loans for maintaining liquidity and working capital for entrepreneurs, micro, small and medium enterprises and agricultural holdings through commercial banks operating in Serbia.
- Assistance to each adult citizen - All adult citizens of the Republic of Serbia will receive 100 euros in RSD equivalent as a direct financial assistance. It is important to note that this programme will not apply to companies that have reduced their employee numbers by more than 10% since the start of the state of emergency.