Higher special VAT rate, lower salaries and ban on public sector hires - Parliament adopts set of 11 laws

On Friday night (6 December 2013), Serbian lawmakers adopted a set of 11 laws as a prerequisite to the adoption of the republic budget for 2014 that will be the subject of discussion in the Parliament as of Monday, December 9th.

During a marathon meeting that ended somewhat after 11 PM, MPs discussed 78 amendments.

Among those adopted are amendments to the laws on budget system, pension and disability insurance, individual income tax, tobacco, value added tax, coporate income tax, tax procedure and tax administration, mandatory social security taxes, reduction of net income of public sector employees, restitution and indemnity.

According to amendments to the Budget System Law, new hires in the public sector are banned for two years, that is, until 31 December 2015.

Amendments to the Law on Pension and Disability Insurance stipulate an increase in pensions twice a year in the period between April 2014 and October 2016.

In line with the amendments to the VAT Law adopted by the Parliament of Serbia, a lower VAT rate that mainly applies to basic foodstuffs and services will be increased from current 8 to 10 percent on 1 January 2014, while computers and IT equipment will be taxed at 20 percent.