Tax leaves Fund for Northern Development

The Trust Fund is founded on the basis of the 2013 Brussels Customs Agreement, where Pristina and Belgrade, with the relief of the European Union, agreed to establish it in the function of developing municipalities in northern Kosovo, inhabited by Serb majority.

Under this agreement, the money raised through goods imported to border points in the north -- to be designated to the Fund for the development of four northern municipalities, respectively: Northern Mitrovica, Leposaviqi, Zubin Potok and Zvecan.

By the end of 2018, the value of this fund has reached over 15. 5m euros, while 11m euros have been spent on 30 different projects, some of which are in the implementation phase, the official site of the European Union office in Kosovo said.

The Fund, according to the EU, favours investments in public projects, which may have an impact on socioeconomic developments in municipalities in the north.

Particularly, the projects proposed should be aimed at improving the lives of local residents. These projects should be financially applicable, cost-effective, substatic and environmental protection.

The Fund's goal is to connect with projects for construction and maintenance of public infrastructure, including roads, hospitals, water supply, sewage treatment and waste management. The Fund also supports projects for businesses, women, civil society, human rights promotion, education, access to health care and transportation.

But, since November 2018, when the Kosovo Government imposed 100 per cent customs tax on all imports from Serbia and Bosnia and Herzegovina, imports from Serbia have fallen to a minimum.

Representatives of civil society in the northern part of Kosovo say that since the tax is imposed, the amount of import has been significantly and therefore reduced and the revenues for this Fund.

Dragisa Mijaciq, from the Institute for Territorial Economic Development (INTER), in a conversation for Radio Free Europe, said that since the tax is being imposed, there are no more means collected in this Fund and therefore there is no funding of new projects.

In the last year, I think there have been completely few tools that have been poured into that Fond and, of course, this is one of the most negative effects that has happened with the introduction of the tax on goods coming from Serbia and Bosnia and Herzegovina. For this very reason, the Fund for the development of four northern municipalities in Kosovo has lost any meaning”, Mijacic said.

The Fund's operation is decided by the management board. This board consists of three members: The EU's Special Envoy to Kosovo has the post of chairman, Kosovo's Finance Minister takes part in the name of Kosovo authorities and a representative of the Serb community coming from the four northern municipalities.

On the official page of the office that the European Union in Kosovo, it is said that income from both crossing points is transferred to an account at a commercial bank in Pristina defined by the EU.

Even Lulzim Rafuna, adviser to outgoing Finance ministries Bedri Hamza, in a proposal for Radio Free Europe, says more than 11m euros have been spent so far, or 78 per cent of the funding for various projects.

“Capital projects concern water projects, the topic of road construction, construction or reconstruction of schools, in sports centres that help socialise young people, the other”, Rafuna said.

Meanwhile, Dragisa Mijaciq, says tools from this Fund have been used to build roads, purchase equipment, build various public facilities. Rarely, he says, the projects concern economic development, doubting that there is also a lack of transparency in the projects won.

“The more devices are spent on developing municipal infrastructure, sports infrastructure or on objects that are of cultural importance, education and other”.

“characteristic for the Development Fund is that recently transparency has been reduced, even in reports of which projects have gained the right to financing and which not”, Mijaciq said.

Based on a report published on the official EU page, although data is not recent, the North Mitrovica municipality has spent more than 3.4m euros from this fund, followed by the Zvecan Community with 3m euros, the Zubin Potok municipality with over 2.5m euros and the Leposavic municipality with over 2m euros.