UNMIK/PR/1192
PRISTINA - PDSRSG Charles Brayshaw today chaired the 19th Economic and Fiscal Council meeting which at the same time marked the two-year anniversary since its establishment. The EFC discussed the regulation on reduction of customs tariffs for capital goods and intermediate goods, the updated 2004 revenue forecast, the macroeconomic projections for 2005-2007, urgent funding for the energy sector, KEK’s VAT obligations, latest developments on the double taxation technical negotiation with Albania, update on the Kosovo Reconstruction Fund and additional measures for improving fiscal policy in the agricultural sector.
The Chairman announced the promulgation of the regulation on the implementation of customs tariff for capital and intermediate goods for the coming days and highlighted the need for the budgetary consequences of the implementation to be met.
The Minister of Finance and Economy Ali Sadriu presented the finalised macro-economic projections which indicate that the total forecasted revenue for the 2005 budget will be
€ 617.9 million.
In order to meet the energy sector’s expenditure needs for 2004 the Chairman agreed to provide from the surplus € 22 million for investment and maintenance priority projects to ensure electricity supply for the coming winter and € 5 million for the relocation of Hade village. The PDSRSG took note that failure to conduct needed investments will remove Kosovo A from production in the near future and failure to displace Hade village will prevent coal mining for the 2005-2006 winter.
The Council advised to cancel KEK’s VAT obligations for 1999-2003 retroactively and exempt KEK’s electricity import from customs duty for 2004. The EFC also noted that a technical negotiation had been successfully completed on 18-21 May between Kosovo and Albania to finalise the text of the agreement on the avoidance of double taxation.
Further developments on the reconstruction requirements were also outlined, noting that the required funds need to be made available shortly in order to meet the expectations of both the Government and the International Community. PDSRSG Brayshaw underlined UNMIK’s strong support for the PISG’s reconstruction effort by saying, “I would like to make UNMIK’s commitment more concrete by specifically earmarking € 1 million of the SRSG’s contingency fund to support the reconstruction efforts purely at the Governments disposition.” This funding could be used to address immediate needs within the reconstruction programme.
The 2005 budget development process will be further discussed at the next meeting of the EFC.