100% tax effect

Since early November 2018, Kosovo's government has imposed 100 percent tax on Serbian products.

Even at the end of December, it has been decided that in addition to products of Serbian origin, the 100 per cent tax is subject to all the good that comes from Serbia, regardless of the country of origin.

This decision, which goes into effect from January 1st 2019, the Government of Kosovo has taken over the request of Trade and Industry Minister Endrit Shala, so that the 100 per cent measure can treat all companies equally.

The demand for local products, even employment, has increased since the tax was imposed until the end of December.

Thus has he said about Indesksonline, the Communications Division from the Ministry of Trade and Industry, adding that in addition to increased demand for local products, some companies are working on three shifts to meet market demand.

UNMIK Minister Andrew Shala and his staff are in daily contact with businesses, and what's worthwhile is that the measure has greatly influenced local businesses, especially producers. Last time we visited a company that produces toilet paper and measures on products of Serbia and Bosnia and Herzegovina has influenced market growth for this producer and, as a result, opportunities have been created for 20 new jobs, which automatically affect youth unemployment. This is implying that the measure is also increasing the market for local businesses and is also affecting employment growth. From what we have on the ground, demand for local products has increased, and even some companies are working on three shifts to meet the market requirement, they say, in response.

During this period, the value of import of goods from Serbia and Bosnia and Herzegovina has suffered an apparent decline, harming both the Serbian and Bosnian economies.

Customs spokesman Adriatic Stavileci, in a response to Indexline, has said that if by now the average value of imports from Serbia was 35m to 40m, within a month it has now dropped to about 300 thousand euros.

As for import from other countries, he says there is a slight increase, but it is still early to speculate on which of the most.

There is an apparent decline in whether Serbia's average monthly import value was 35m to 40m within a month now it has dropped to about 300,000 euros. As far as imports from other countries are concerned, we have a slight increase, but it is still early to conclude exactly which countries have increased, Stavileci has indicated.

Kosovo Business Alliance Chairman Agim Sahini has said that the consumption of local products for just a month from tax delivery has resulted by 50 percent, while employment has increased by 15 percent during this period. And the economy has grown by 5 percent.

The business alliance has done a 100 percent tax impact research on Kosovo's economy, which has resulted in the growth of the economy from November 21st to December 5th over 5 percent, the credibility and consumption of local products has increased by over 50 percent, while employment above 15 percent. This has shown what fierce competition local productivity has been with from Serbia's products. But this cannot be sustainable growth if this tax is removed and there will be no improvement of the investment environment in Kosovo because another research we've done earlier in July has turned out that 94 percent of foreign investors coming to Kosovo, leaving Kosovo and going to invest in these countries right in other Western Balkan countries, and one of these is Serbia) itself, Shahini has indicated.

The growth of consumption and local product products has significantly influenced, showing how much the market has been damaged by Serbian products.

So has he said of Indesksonline, executive director of the Kosovo Club of Producers, Astrit Panja, who says that with the sale of Serbian products in Kosovo, it has been a non-combat competition.

“We believe that the 100 per cent tax applied to Serbia is bringing positive results in terms of increased production of products in Kosovo. Given that we have had non-combatal competition from Serbian products that have come to Kosovo and are sold under production costs, then, in turn, with taxing 100 percent, these products are no longer competitive in Kosovo and are not damaging the market. For this reason, Kosovo producers are now more competitive, and some of them -- we have no precise data -- have informed me that there is an increase in employment along with production”, Panja has declared.

On the other hand, it should be suggested that with the tax being introduced, smuggling of goods has increased in northern Mitrovica. That's what the Founding Prosecutor's Office in Mitrovica said earlier days, during a weekend conference.

In contrast, the Government of Kosovo has shown itself determined that this event will not withdraw without mutual recognition from the state of Serbia.