GazpromNeft Serbia NIS company records profits and positive results in Serbia, what are the gains for the state

24. April 2013. / News Serbia Energy

Serbian budget will earn from the last year profit’s dividends 4,6 billion dinars. Serbian oil industry company(NIS), majority owned by GazpromNeft, announced payment of 12,36 billion dinars’ dividends from last year’s profit, although the state is the owner of almost 30% of shares capital of the company.

Big part of this cake will belong exactly to it. When we add dividend tax of 15% that NIS will pay in the name of paid out dividends to all we will get mentioned number bigger than four and a half billion dinars of income for Serbian public cash register.

This isn’t only a number that will solve all problems, this year’s budget has, but it will make job to Minister of Finance easier at some point. Deficit of state cash register for this year is projected to 3,6 percent of domestic product i.e. 132 billion dinars. State minus has increased to almost 23 billion dinars in the first two months of the year- although Ministry of Finance claims that these actions are in accordance with the plan, International Monetary Fund and experts from Fiscal Council stated that there is a reason for fear from budget deficit which significantly increases. Unplanned 4,6 billion incomes from NIS dividends won’t clog these holes but they won’t be bad either: in comparison, this is the number 12 times bigger than all this year budget subsidies for culture and 10 times smaller than subsidies intended for agriculture.

Of course, state cash register will have much bigger advantage from NIS within company’s tax incomes. This company paid around 93 billion dinars of budget incomes from NIS last year.

However, the biggest profit citizens have as taxpayers from NIS is in the fact that factory is privatized and it is not loser, whose minuses are being covered from public cash register, anymore.

Serbian citizens have spent more than 4 billion EUR on financing bad business of different companies in state and social ownership. This outcome of taxpayers was 700 million EUR yearly only in 2010 and 2011. For example, according to data from Agency for Industrial Registers, only Pancevo’s Petrohemija has made a loss bigger than 11 billion dinars and railway subsidies bigger than 14,5 billion dinars are planned for this year budget.

Such company was NIS, too: It had made a loss of 3,8 billion dinars in year it had been sold to Russians. It wasn’t a profit like it was firstly represented which was a scandal. NIS accumulated even 55 billion dinars’ loss in total until privatization.

The owner of NIS, Russian GaspromNeft has also done quite well. One of the reasons of so high profit is very low rent fee, NIS was sold to them for little money- the price according to which Russians gotten 51% of share capital is equal to last years’ company profit.

Source;Serbia Energy/Dnevnik

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