The set od economic measures

On 31st March 2020, the Ministry of Finance has presented the set of measures for mitigation of crises caused by COVID19 pandemic in the total amount of EUR 5.1 billion. The measures refer to the area of fiscal politic, maintaining the liquidity of the economy, direct support to companies and support to all adult citizens.

With respect to fiscal politic, three crucial measures have been adopted:

• The payment of taxes and social security contributions for private sector during the state of emergency is postponed – the payment will begin in 2021, at the earliest and liabilities can be repaid in 24 monthly installments;

• Deferral of payment of corporate income tax in advance in the second quarter of 2020;

• Donors are exempt from VAT;

In terms of direct assistance to the private sector, to all sole-proprietors, micro, small and mediumsized legal entities the assistance is foreseen in the form of minimum wage payments, while aid for large legal entities is 50% of the net minimum wage for employees who have been terminated by decision.

Measures to maintain the liquidity of the economy will be implemented in two ways:

• Business Support Program through the Development Fund (this applies to soleproprietors, micro, small and medium-sized legal entities, agricultural holdings and cooperatives) - EUR 200 million is foreseen;

• Through a guarantee scheme to support the economy for loans for maintaining liquidity and working capital for sole-proprietors, micro, small and medium-sized legal entities and agricultural farms. This type of support will be realized through commercial banks, and the total value of the guarantee scheme is about RSD 240 billion;

The regulation of legislation regarding issuance if corporate bonds are envisaged, as the manner of financing of companies. This measure aims to enable large legal entities to borrow on more favorable terms.

However, there are also two categories of legal entities that will not be able to count on support measures:

• Those entities who have decreased the number of employees by more than 10%, as of the moment when the state of the emergency was introduced (not counting the part-time employees whose contract expires during a state of emergency);

• Those entities who have suspended the business before declaring a state of emergency;

Additionally, in public it is mentioned (but not at the press conference organized by the Ministry) that moratorium on the payment of dividends shall be introduced, whit exception for public

companies. It is not clear how this measure will be realized and if it refers even to those entities that fulfill their liabilities timely and do not intent to use any sort of support mentioned above.

Finally, all the above mentioned measures were presented at the press conference. The adoption of a set of documents that will enable the implementation of the measures and provide answers to many questions raised is expected in the first half of April.

Of course, Crowe team will monitor the work of the Ministry and keep you informed of all the news in this regard.