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Serbian Minister for Finance Dušan Vujović has backed NALED’s proposal to exempt business novices from tax for at least one year. At the meeting of the Serbian Government’s Expert Group on Combating Grey Economy, he said that a working group in charge of drafting the regulation should be established as soon as possible for the measure to take effect in 2018.

“I support the initiative because it is very important to increase the chances for as many young people as possible to take courage and start a business. The tax exemption wouldn’t cost the Budget much, and it would send a strong message of encouragement to beginner entrepreneurs and open the door to legal work,” said Vujović at the meeting where NALED’s Analysis of Tax and Non-Tax Burden on Business Novices was presented to the relevant institutions.

The Minister said that it was particularly important for the measure to be accompanied by regulations that will eliminate the possibility of imposing increased taxes on beginner entrepreneurs once the exemption period has expired.

Goran Pitić, who chairs NALED’s Association for Fair Competition, reiterated that the incentive was one of the key measures envisaged under the National Programme for Combating Grey Economy, adding that it would have numerous positive effects and it would show that young people matter. He suggested that facilitating business operations in the digital world would additionally encourage entrepreneurship, open up new sources of financing and enable Serbia to skip a few steps on its development path.

Nikola Altiparmakov, member of the Fiscal Council pointed out that the new measure would be welcome as it would enable Serbia to try to change its model of economic development to benefit entrepreneurship. “The tax exemption proposal is more transparent and more just than many other incentives that we’ve got at the moment and it should be available to as broad a spectrum of people as possible,” said Altiparmakov.

Other participants pointed out that the support for the development of entrepreneurship was urgent considering that, according to the Serbian Business Registers Agency, the average number of start-ups has dropped by nearly a third in the past ten years – from 45,500 to 33,000 a year.

NALED’s proposal means introducing tax exemption for young people who have graduated from university or secondary school in the past six months and for any person registered with the National Employment Agency for longer than six months. According to NALED’s analysis, at least 8,000 people would benefit from the incentive in the first year, the potential cost wouldn’t exceed 1.9 billion dinars – which is eight times as little as the state’s allocated funds for incentives – and no additional allocations from the Budget would be required.

According to NALED’s research, to establish a hairdresser’s salon or an IT company one needs from 4,610 to as much as 31,610 dinars, and to start a limited liability company between 10,370 and 57,370 dinars. This is followed by monthly tax payments which for entrepreneurs range between 145,000 to 400,000 dinars per year and for limited liability companies amount to just under 180,000 dinars.