Serbia: where taxes bring warmth

Press releases, 13.01.2017

In a joint project the SDC and its partners are working on improving the collection of property taxes in eastern Serbia with the aim of using the funds for infrastructure projects. An example of such a project is the installation of new, sustainable heating systems in a secondary school in Boljevac.

For the first time ever, Zorica, a teacher in the small eastern Serbian town of Boljevac, can give lessons in a warm classroom during the winter. Her hands are not icy cold while she writes assignments on the board. It is also the first winter that Marija, the captain of the women's basketball team, and her teammates do not have to play in a cold gym. For the primary-school pupils of the ’9.Udarne Brigade’ school and pupils of the ’Nikola Tesla’ secondary school it is also the first winter they do not have to keep their coats on in class.

Not only can his teachers and pupils enjoy working and learning in warm classrooms, but Velibor Stanojevic, the director of the ’Nikola Tesla’ secondary school, also saves on heating costs – thanks to better insulated rooms and windows, which are part of the new environmentally friendly and cost-effective heating system. “The biggest benefit is the reduction of harmful gases, a growing concern for the environment. Waste combustion is reduced to a minimum”, adds Stanojevic.

He has spent years trying to secure the best possible conditions for his staff and pupils. "How important it is to have an efficient heating system can perhaps be best explained by the fact that in Boljevac temperatures can go down to minus 15 degrees in winter." Thanks to the project of the SDC and the GIZ, more than 700 children now enjoy improved classroom heating.

©FDFA

Improving local economic development

The municipality of Boljevac won a competition that was launched as part of the SDC and GIZ project" Municipal Economic Development in Eastern Serbia". The competition was designed to encourage municipalities to improve their collection of property taxes and to increase the accountability both of the citizens and the local governments. The award of CHF 1 million was distributed among the five municipalities that were most efficient and successful in collecting property taxes. The money had to be spent on development projects which benefit all citizens, for example on water systems, heating for schools, a new locker room for a football club, the modernisation of the local administration, the completion of a basketball court and a new system of energy-efficient public lighting. Boljevac won first place and received EUR 333,000.

Until the reform of the Law on Local Self-Government, some local governments either did not collect local taxes or they allowed citizens and companies to owe often substantial amounts. The collection of property tax was particularly weak. The Serbian government now plans to change this practice, enforcing tax collection in line with the principles of good governance that make paying taxes mandatory for all citizens. Changes will focus on creating a better framework for local governments to collect own-source revenues. The property tax has the most significant share of it.