GOVERNMENT OF THE REPUBLIC OF SERBIA ADOPTED THE DRAFT AMENDMENTS TO THE LAW ON FINANCING LOCAL SELF- GOVERNMENTS

18. August 2016.

Belgrade – Ana Brnabic, Minister of Public Administration and Local Self-Government, said that the Government of the Republic of Serbia had adopted the draft amendments to the Law on Financing Local Self-Governments, which provided for a reduction in the share of the municipalities and cities in the revenues collected from the income tax.

Following a meeting with representatives of the municipalities and cities, Ana Brnabic said at the Palace of Serbia that she expected that the proposal, "which was important for the Government to adopt because of the International Monetary Fund", would soon be addressed by MPs in the Serbian Parliament.

Minister Brnabic said that under the draft law, of the total income tax amount paid to the local self-governments, 77 per cent of it, instead of the current 80, would, in the future, be left to the cities, and 74 per cent of it to the municipalities, while the rest of it would go to the Republican budget.

She underscored that under the adopted proposal of the new law, Belgrade’s revenues would be reduced further, and that 66 percent of the revenues, instead of 70, would, in the future, be left to the capital.

“We thought that the reduction, on the average, should be around four per cent,” Minister Brnabic said, pointing out that the local self-governments would, then, be motivated to fight.

Minister Brnabic also said that by the proposal, under which less money was provided to the local self–governments, they wouldn’t bear the brunt of savings of eight billion dinars themselves, but that it would be 4.8 billion dinars.

The Minister pointed out that the income tax hadn’t been reduced, but that the collected amount was redistributed between the Republic and local self-governments.

Sinisa Mali, the Mayor of Belgrade, said that he supported the amendments and that the city of Belgrade would accept even greater reductions.

Milos Vucevic, the Mayor of Novi Sad, pointed out that the bill was far more favorable than the existing one, adding that the city of Novi Sad was better off under the new law.

Boban Djurovic, the Mayor of Vranjacka Spa, said that he had proposed to the Government of the Republic of Serbia that a lack in the local self-governments’ funds should be compensated by the Government’s financial support of all local self-governments’ development projects.

Source: “Beta” news agency, Radio and Television of Serbia and Coordination Body