Senior World Bank economist for Serbia: It is difficult to predict FISCAL CONSEQUENCES related to NIS

Photo: Tanjug/RADE PRELIC, Shutterstock

World Bank senior economist for Serbia Lazar Sestovic said today that the current situation regarding NIS (Petroleum Industry of Serbia) and other state-owned enterprises carries potentially serious fiscal risks for the state budget.

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Speaking to journalists at the presentation of World Bank's new Serbia Public Finances Review, he said that any disruptions in the operations of NIS could have significant but difficult to predict fiscal consequences.

Sestovic also pointed out that the sale of oil derivatives in Serbia should not affect state revenues from VAT and excise taxes, because these taxes are collected regardless of who the distributor is.

According to him, what could produce a loss in the budget is the absence of profit taxes, which NIS regularly pays every year and which will represent a significant source of income, primarily in 2026, and partially already in 2025.

"Further effects will depend on the scenario that will be implemented, i.e. whether derivatives, or crude oil for processing will be imported. That is why it is difficult to give a precise assessment of the overall impact at this moment," Sestovic said.

The situation around NIS is concerning, but it is under control since the state is ready to react if risks materialize, he continued.

He also said that the public companies sector has been one of the weakest points of domestic finances for years.

Sestovic noted that in the previous period, Serbia was going through very expensive crises in public systems, including problems in Elektroprivreda Srbije (EPS), Srbijagas and Air Serbia, which required significant budgetary interventions.

"We hope that this time there will be no need for such measures. The positive thing is that the state currently has high deposits, over 4 billion euros, which allows it to react if necessary through possible purchase of a part of NIS or through procurement of oil derivatives," the World Bank economist said.

(Telegraf.rs/Tanjug)