Sudden or taxed, two KDI scenarios

The Kosovo Democratic Institute has today presented two scenarios that include its positive and negative effects in the event of the 100% tax maintenance or suspension of Serbia and Bosnia and Herzegovina products. In presenting the scenarios, it was said that the area in which the tax has had the most impact is the process of Kosovo-Serbia dialogue.

According to KDI, a positive effect is the attempt to prevent the negative scenarios for Kosovo under the dialogue process, which can be manifested through specific agreements that are not in favour of Kosovo.

Eugen Cakoli from KDI said that taxing 100% spread real relations between Kosovo and Serbia, and how far the parties are from normalisation.

As a negative effect, it cited Serbia's conditioning to continue with dialogue and therefore empowering its position in relation to the international community. Cakolli said that in terms of Kosovo's reports with international partners, as a positive factor it was identified to be increasing the level of US involvement in the dialogue process, while as a negative effect was shaken by international partners' support to Kosovo, which has been manifested through various punitive measures and actions.

The “Fusha on which the tax was mostly impacted, we have estimated that it is the process of Kosovo-Serbia dialogue. And when the tax is not suspended 100%, we have estimated that the main positive effect in relation to the dialogue process is the reflection of real relations between Kosovo and Serbia, the position of Kosovo in this process and the lack of the normalisation process that has started since 2013. The other very positive effect is the attempt to prevent the negative scenarios for Kosovo under the dialogue process, which can be manifested through specific agreements which are adverse for Kosovo”, he said.

Life Krasniqi from KDI said the main positive effect of suspending the tax would be continuing dialogue and strengthening the negotiating position in relation to Serbia. While, the negative effect would be the continuation of dialogue without a unique position of the political spectrum in Kosovo, as well as the risk of reaching an agreement that could present unfavourable compromise for Kosovo.

“How much these negative scenarios could be postponed, how much Kosovo could, within the dialogue process, reach an agreement that is in its favour, this is even with unity now missing within the institutions of the Republic of Kosovo, so the lack of political spectrum and the power of Kosovo to lobbi over what it requires in the context of this process”, she said.

Krasniqi said that in the external plan, the suspension of the tax would improve reports between Kosovo and international partners, while as a negative effect the pressure international partners could exert for reaching a Kosovo- Serbia within an artificial timetable, not paying attention to the contents of final agreement

If the tax continues, we have said that Kosovo's own position in these negotiations is strengthened, it is seen to be reflecting the normalisation of relations itself. So, what is the normalisation of relations, which have not reached the end to normalise relations as expected. As far as it can avoid those negative scenarios remains to be seen, since this is the very high political process where not only Kosovo and Serbia are involved, but we also have international allies, the US, the European Union, but it is clear that by this it has become clear that Kosovo is not ready to accept any kind of scenario, and is not ready to make any kind of compromise”, he said.

In KDI they say this analysis is trying to give the public a broader picture of the effects that “exhumation” or “tax storage” would produce in several dimensions, first in the dialogue itself, then in Kosovo's relations with international partners, in domestic political developments in the country, in the economy and ultimately in citizen perception.

According to KDI, these scenarios have been realised in view of the fact that, in spite of current political attitudes and discours, few arguments have been given on priorities and shortcomings of the 100% tax maintenance option, and options for its suspension. /