COVID 19 – New Support Measures for the Serbian Economy

July 24, 2020

COVID 19 – New Support Measures for the Serbian Economy

July 24, 2020

Miloš Velimirović

Miloš Velimirović

Partner

Katarina Aškić

Katarina Aškić

Junior Associate

As the persistent presence of the COVID-19 pandemic continues to burden the Serbian economy, the Government of Serbia has decided to introduce yet another package of economic measures. These new measures, announced by the President of Serbia on 22 July, aim to help alleviate the effects of the prolonged economic crisis caused by the coronavirus, and consist of the following:

 

  1. All entrepreneurs and employees of micro, small and medium companies will receive 60% of the minimum wage The state will pay 60% of the minimum wage to all eligible employees for two months, that is July and August 2020. As announced, the first payment is expected before 10 August (cca. EUR 155), while the second payment should be paid in September 2020. These measures present targeted help towards smaller business and enterprises which are particularly hit by the economic effects of the pandemic.
  2.  Serbia will launch a new project called “My First Salary” – This project entails the state paying RSD 20,000 (cca. EUR 170) per entrepreneur for the employment of a high school student and RSD 24,000 (cca. EUR 200) for a university graduate for 9 months.
  3.  The payment of taxes and contributions will be postponed for another month.
  4.  Another moratorium on payment obligations of both, companies and individuals, should come into force as of 1 August 2020, and should last at least 2 months.

 

Also, the Ministry of Finance said that the state will set aside RSD 36 billion (cca. EUR 306 million) for 60% of the amount of the minimum wage in 2 months, while the postponement of taxes and contributions on wages for one month will cost the state about RSD 30 billion (cca. EUR 255 million). When designing this new set of measures, the Government aimed not to compromise the goal of keeping the public debt below the range of 60 – 61 of the GDP for 2020.

In the course of next week, the Serbian Government should adopt a new legal act which will more clearly and precisely define the above-mentioned measures.

 

 

This text is for informational purposes only and should not be considered legal advice. Should you require any additional information, feel free to contact us.

Contact:

Miloš Velimirović, Partner
milos.velimirovic@sog.rs

Katarina Aškić, Junior Associate
katarina.askic@sog.rs

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