BSN and Rail Cluster SEE plan to, in cooperation with a number of other business organizations operating in the Republic of Serbia and chambers of commerce that gather foreign investors, launch an initiative to postpone the adoption and implementation of the Law on Taxation of Greenhouse Gas Emissions, proposed by the Serbian Ministry of Finance.
The EU regulation establishing the Carbon Border Adjusting Mechanism for carbon dioxide emissions (CBAM) applies from May 2023. In October 2023, the obligation to report on carbon dioxide emissions was introduced, and from January 2026, companies in the EU are obliged to pay a tax on goods imported from countries where there is no established system of tax payment for carbon dioxide emissions.
Due to all of the above, the RS Ministry of Finance has prepared a draft of the Law on Taxation of Greenhouse Gas Emissions, the implementation of which will represent a significant burden on producers and export-oriented small, medium and large companies, while the money collected from the taxes provided for by the Law ends up as just another tax revenue for the budget of the Republic of Serbia.
The Ministry of Finance wants to introduce new tax instruments and forms in short order, without prior analysis of the effects of the application of this Law on producers in Serbia, their competitiveness on foreign markets and the overall financial burden.
In addition, the proposal of the Law does not define where the billions of dinars from the annual collection of this tax will go and for what purpose it will be used.
In European countries, these funds are most often poured into funds to support the decarbonization of production, from which exporting companies can obtain favorable funds to reduce carbon dioxide emissions in the long term or reduce them to zero.
The economy and citizens were not involved in the early phase of the adoption of this law, and the limited public discussion organized in last three weeks proved to be insufficient to introduce practically another new tax form to the economy. The situation is made particularly difficult by the fact that Serbia`s economy relies on the use of energy from hydrocarbon sources and that its CO2 footprint is significantly higher than many competing economies in southern, eastern and central Europe.
Preliminary calculations show that with the introduction of the new tax form, certain products will become more expensive in the range of 5 to 58 percent, which will make their placement in exports even more difficult, because the long- term almost fixed dinar exchange rate in combination with domestic inflation has significantly “raised” the price of exporting products to European and other markets in the period 2020-2025.
From the moment when the EU introduced the CBAM mechanism until today, the competent institutions in the Republic of Serbia have done nothing to open consultations with business sector on how to comply with these obligations and at the same time reduce their effect on the Serbian economy by active measures. Just two months before the introduction of the CBAM tax by the EU, the state passes a law that directly threatens the survival of thousands of exporters without the readiness to redirect the money thus pumped from the economy to solving the problem – long-term reduction of CO2 emissions.
An additional absurdity is the fact that the Ministry of Finance, in its reasons for passing this Law, refers to the Development Strategy of the Republic of Serbia until 2030 and the National Action Plan for Climate Change 2019-2030, which were not adopted by the Government of the Republic of Serbia and do not exist as such.
