Settlement of liabilities to the state crucial to the construction sector

With a share of close to 6% of GDP and 35% growth last year, the construction sector is one of the main drivers of economic growth, which is why it needs to be supported by special measures to overcome the negative effects of the pandemic. NALED’s Property and Urbanism Alliance has designed and submitted as many as 20 recommendations to the line ministry. The set also includes measures for the transport sector, which has been strongly affected by the crisis.

The requirement that the state and public companies urgently settle their liabilities to construction companies for infrastructure projects is among the key proposals is. It is also necessary to extend the construction permits validity, as due to the state of emergency, builders are not able to pay the land development contribution, notify on the start of works or obtain a use permit.

- Since 2016 and the establishment of the electronic building permitting system, in which NALED participated, the number of permits issued rose from 9,500 to almost 22,000 a year we had in 2019. And this year started off great. In the first two months of 2020, we already have 2,700 licenses issued, 29.1% more than in the same period last year. Last year was marked by the highest growth in construction engineering, it was the sector with that attracted the most foreign direct investments after the manufacturing and it is important that we do not interrupt this growth now. After submitting the proposals, we started working with the line ministry to analyze the proposed measures and apply the best solutions - says Gojko Vrcelj, President of NALED Property and Urbanism Alliance and Head of Work-out Depratment at Erste Bank.

Due to the importance of public investment in infrastructure for the growth of construction engineering, the Alliance proposes to support cities and municipalities through interest-free loans to pursue infrastructure projects.

A useful way to support the companies would be to defer payment  for procuring construction materials and energy. When it comes to administrative burdens, it is necessary to respect the deadlines for obtaining connection to the electrical grid, extend the deadlines for payment of land management fees, better organize the work of the services managing the electronic licensing system, as well as the work and worker safety on construction sites.

Financial constraints relaxation is important for both sectors, which would entail not only deferring, but also exempting from income taxes and contributions, as well as taxes and fees during the state of emergency and securing a special type of working capital loans that they would receive in a shortened procedure. It has also been proposed to shift the deadlines for filing tax returns, especially for property, to freeze VAT debt and to allow VAT to be declared and paid on a billed invoice.

Compensate for losses to carriers

In the transport sector, there was a decline in revenues of more than 50% compared to the average monthly revenue in 2019. Therefore, it was suggested to consider the possibility of direct financial support to companies in this sector that had 40% lower revenue compared to the same month of the previous year.  It is important not to forget the public companies operating in the field of transport when implementing the measures. In addition, public transport companies would be assisted in postponing obligations to fuel suppliers. Finally, it is proposed to open additional lanes for trucks at the borders, which has already been applied at individual crossings.

Related Content


Property and Urbanism Alliance session organized


The session presented the Quarterly report on the Alliance activities in 2020...Read more

Property and Investment Alliance

The Property and Investment Alliance, as an expert working body of NALED, was founded in late May 2018 by NALED members, and today it...Read more

This website uses cookies to ensure the best user experience. By continuing to browse the site, you consent to the use of cookies.