Serbian Prime Minister Mirko Cvetkovic today stated that the IMF mission did not insist on a VAT increase, as announced in some media, stressing that there will be no further tax burdens on the Serbian economy.

Attending the beginning of work on construction of a main road in Kragujevac, Cvetkovic said that the government policy is not to increase taxes for citizens and businesses, underlining that the IMF mission did not demand higher tax rates yesterday as a way of boosting budget revenues.

The Prime Minister said that they discussed increasing the budgetary deficit due to a lower revenue stream caused by the crisis.

He stressed that at yesterday’s meeting with IMF representatives it was agreed to reduce expenses by reforming the public sector.

However, these reforms cannot be carried out over the next few months but will take next several years, because we must plan each step precisely, he explained.

He voiced his pleasure that the talks with the IMF will be successfully concluded before September 2, when the delegation is due to finish its visit.

Deputy Prime Minister Jovan Krkobabic also met with the International Monetary Fund (IMF) delegation, led by IMF mission chief for Serbia Albert Jaeger.

According to a statement issued by Minister Krkobabic's Cabinet, the two sides discussed the functioning of the Serbian pension system during the global economic crisis and agreed that there will be no reduction in salaries and pensions in the upcoming period.

It was concluded that the crisis has already reached its peak and that it will take at least a year for the Serbian economy to recover.

Krkobabic pointed out that pensioners have been adversely affected by the ongoing financial crisis.

Jaeger and his associates voiced their satisfaction with government measures for reforming the Serbian pension and invalidity insurance system, concludes the statement.