A recent initiative has emerged in Serbia, proposing amendments to the Value Added Tax Act with a dual purpose: encouraging food donations and combating food waste. These proposed changes carry significant implications, not only for the economy but also for environmental, social, and governance (ESG) considerations.
The proposed amendments present a strong possibility to tackle food waste by incentivizing surplus food donations from legal entities involved in food production or sales. By exempting such donations from Value Added Tax (VAT), the initiative aims to eliminate financial barriers that often deter businesses from contributing excess food to social and other institutions. This exemption is particularly noteworthy in ESG frameworks, aligning economic activities with environmental and social goals.
Furthermore, the beneficiaries of these donations extend beyond mere economic gains. Social institutions, foundations, and endowments dedicated to humanitarian causes and supporting socially vulnerable demographics stand to benefit significantly. By receiving increased donations of surplus food, these entities can amplify their efforts in addressing food insecurity. This is a critical social issue that intersects with economic disparities and environmental sustainability.
The proposal includes a 1% limit on the total value of donations relative to the donor’s previous fiscal year income. This provision ensures that while incentivizing donations, the economic stability of the donating entities remains safeguarded. From an ESG standpoint, this balance reflects a holistic approach to sustainable development.
If enacted, these amendments could catalyze a ripple effect, fostering a corporate social responsibility (CSR) culture within Serbia’s business landscape. By integrating ESG into taxation policies, the government could further promote a more sustainable and equitable economy. Overall, this initiative underscores the interconnectedness of economic, environmental, and social factors in fostering inclusive growth and sustainable development.
At Gecić Law, will monitor proposed amendments, recognizing their potential to address crucial societal challenges while promoting sustainable development. Our commitment to contributing to initiatives that enhance social welfare and environmental sustainability remains steadfast, reflecting our ongoing dedication to corporate social responsibility.
