Changes to Serbia’s excise tax law came into force on 1 October, raising excise duties on fuel, cigarettes, alcohol and coffee by eight per cent.
However, this decision does not necessarily mean that these products will become eight per cent more expensive in Serbia, Bojan Stanić, deputy director of the Strategic Analysis Department at the Serbian Chamber of Commerce, told Euractiv. The key factor is the price structure, especially regarding fuel.
“Excise taxes are increasing by eight per cent. When you look at the price structure of fuel, one part relates to the purchase price of fuel, and then excise tax is added, and this part of the excise tax is increased by eight per cent. This does not necessarily mean fuel at the pumps will become much more expensive,” says Stanić.
When asked why the Serbian government decided to increase the prices of these four products while other price increases were not related to excise taxes, Stanić said that this decision could be related to the strain on the Serbian budget.
“The budget of Serbia is constrained, and it is under pressure due to rising interest rates for repaying the state’s debt. On the other hand, there is pressure that mostly affects the poor, and of course, it is necessary to provide increases in pensions and one-time transfers to the population in terms of assistance. All of this is applied to relieve the poorest part of the population. Additionally, it was necessary to find additional revenues. Someone calculated that increasing excise taxes was the way to go.”
Stanić adds that the government in Serbia wants to achieve results in a short period, which, in his opinion, makes sense.
“However, when we talk about other products like coffee, alcohol, and tobacco, which are also subject to excise taxes, these are not essential goods; people can live without them. Therefore, it is believed that there will be less resistance if taxes on these products are increased,” he added.
Tomislav Mićović, Secretary-General of the Association of Oil Companies of Serbia, also spoke to Euractiv, emphasising the negative effects of high state levies.
“The greater the difference compared to fuel prices in neighbouring countries, the higher the proportion of fuel consumed in Serbia that is purchased in neighbouring countries,” says Mićović, who concludes that such a situation is not unique to Serbia.
(Jelena Jevtić | Euractiv.rs)
Read more with EURACTIV
IMF mission urges Romania to further reduce its already high fiscal deficit
Source: euractiv.com
