Reduction in grey economy to add up to EUR 700 mln to budget

BELGRADE - Finance Minister Lazar Krstic said on Thursday that in the next two to three years the share of the grey economy in Serbia's overall economy could shrink from 31 percent to around 24 percent of GDP, bringing EUR 600-700 million in budget revenues.

Nowhere in the world has the grey economy been completely eliminated, but its average share in Eastern Europe amounts to 23-24 percent of GDP and that is something Serbia should aspire to, Krstic told reporters during a break in the 18th General Assembly of the Intra-European Organization of Tax Administrations (IOTA).

However, a shrink in the Serbian grey economy cannot be done overnight, Krstic said, noting that it is possible to ensure that in two-three years, with a different approach to tax obligations, changes to tax procedures and legal arrangements.

In some sectors, it would be possible to secure a reduction in the grey economy even more quickly, but that would require a coordinated action of several institutions, the Serbian finance minister said, explaining that he is referring to the countering of trafficking in excise products such as tobacco.

Krstic signaled that a public debate on changes to Serbia's tax system will be held in late September.

He explained that the changes will be aimed at creating a tax system that will be sustainable in the long run so that the government does not have to intervene so as to secure the funds that are lacking or make spending cuts.

The IOTA General Assembly is bringing together over 150 representatives from more than 46 countries of Europe and Central Asia, the topic of the meeting being
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