Serbian Govt Endorses Suspension of 20% Capital Gains Tax - Minister

The government decided to suspend in 2009 the 20% capital gains tax and the savings interest tax, also equivalent to 20%, Minister of Kosovo and Metohija Goran Bogdanovic told a news conference.

He added that the government will also suspend the 0.3% tax on transfer of rights of securities trading for the same period.

The purpose of this measure is to boost  savings in banks and to encourage trading of securities on the bourse, Bogdanovic said.

The measures need to be approved by parliament before they take effect.

Other measures aimed at cushioning the impact of the crisis include raising the guarantee for depositors in local banks to 50,000 euro ($64,400) from 3,000 euro, a step endorsed by government earlier this month.

Last month, Serbia’s central bank (NBS) scrapped its mandatory reserves requirement for banks' fresh borrowing in foreign currency retroactively from October 1, aiming to boost the liquidity of the country's banking system amid the global financial crisis. The NBS also said it increased to 20% from 10% the share of mandatory reserves on foreign currency deposits, which banks have to maintain in Serbian dinars in a bid to stimulate demand for local currency.

($=0.7762 euro)