Saturday, September 7, 2013

Vucic: Goal is to create healthy and sustainable economy

9/6/2013 6:55:00 PM
BELGRADE - Serbia's First Deputy Prime Minister Aleksandar Vucic said on Friday that the reforms that need to be carried out are aimed at creating a healthy and sustainable economy, and announced that the pension system overhaul will be completed by winter's end. During a business lunch organized by AmCham, Vucic said that a big job of undertaking economic reforms will have to be completed during autumn and then by the end of this winter. “Difficult and painful cuts lie ahead, but our goal is to create a healthy and sustainable economy.

 Our approach will be to create a solid system, and that is why we need to carry out the reforms in various spheres of the society as a whole, primarily the economic one,” Vucic said. Serbia needs new laws on labor, planning and construction, and an overhaul of the pension system, he said. Vucic said that Finance Minister Lazar Krstic and Minister of Economy Sasa Radulovic already have ideas and a plan as to how to put reforms in place, but it has been agreed that, until this plan is complete, ideas should not be made public.

 “We will present courageous solutions, solutions that have not been used in Serbia up to this point as there was no political power that could have pushed them through,” Vucic said. Underscoring that the goal is a sustainable economy that will not erode year by year, Vucic noted that the Serbian government's objective is to create a solid system, in which business will generate profit. In line with that, a series of reforms will be carried out- in order to ensure a drop in unemployment, labor tax will be reduced, an entire set of labor-related regulations will be changed, and the pension system reform will be completed by winter's end. 

 Serbia needs to cut the red tape, ensure transparency in the state administration's operations, electronic monitoring of cases, implement a comprehensive reform of the public administration and encourage the private sector and development of small and medium-sized enterprises, Vucic added. “I think it is extremely important to complete the job within the shortest possible time frame.,” Vucic stressed. Youth employment will be one of the priorities, Vucic said, adding that the Serbian government is ready to hear out Am Cham's ideas in relation to that.

 “We will work in spite of political hardships that we are facing, since if manage to do this, we will lay foundations for a better and more successful system,” Vucic underscored. The first deputy prime minister said that for changes to be successful, the manner in which the fiscal reform will be put into practice is also important, as well as the manner in which we will implement progressive taxation, a zero tolerance approach toward tax evasion, adding that the judiciary also plays a significant role. 

“We will lose everything unless we modernize Serbia, and that is the reason why that modernization will certainly cost us, who are taking part in it, dearly. I hope that we will carry out the reforms by the New Year, by winter's end at the latest,” Vucic concluded. Vucic stated on Friday that labour taxes will be reduced considerably so as to stimulate employers to make higher investments. Vucic underscored that the taxes will not be reduced by just one or two percent, and that the tax cut percentage would be substantial. Addressing reporters after the meeting with members of AmCham in Belgrade, Vucic said that the authorities are discussing the possibility of relieving taxes for hiring people of up to 30 or 35 years of age. 

 Vucic noted that the government has not discussed VAT increase as this measure would lead to negative results at the moment when economic activities are rather low. Replying to reporters' questions, Vucic said that painful cuts ahead cover the labour law, pension system reform and completion of company restructuring processes. When asked whether coalition partners would back pension system reform, Vucic said that Serbia has to go make progress regardless of the government because a healthy system needs to be set up. Photo Tanjug, R. Prelic

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