EU Gjilane Regional Office

The Central Fiscal Authority-CFA

The work of the Central Fiscal Authority (CFA) has the major  priorities  of  devloping  a  balanced,  self-sustaining   Kosovo Consolidated Budget and adminiistering revenue-generating activities. The Kosovo Consolidated Budget  is  means  by  which piblic  services  are  financed  in  Kosovo.Recently, a major  area  of  work f or  the  (CFA)  has  been  the  devlopment  and implementation of the Presumptive Tax. Passed as a regulation in May, the presumtive tax is a money payment to the Kosovo Cosolidated Budget based on a business presumed income. Due every three months' the first preumtive tax  collection  began in October. With over 10,000 businesses paying the tax first time round, the  implementation  was  a  major  success. A total amount of over 6m DM was collected; vital revenue for the Kosovo Consolidated Budget.

The Banking and Payments Authority of Kosovo(BPK) was established to foster the development of an efficient and sound banking and payments system, as well as  to  provide  financial  services  to  public bodies, such as the Central Fiscal Authority (CFA), UNMIK personel,  and  the  electric and  telephone utilities. BPK's main responsibility is for licensing banks and other financial institutions. It  also  provide

a full range of banking and payment services for public entities, devloping and  operating  clearing  and  payment  services  to banks For example, as financial agent to the CFA, the  BPK  colletcts  payments  of  taxes  and  costums  duties  at  its  teller windows. The BPK does not compete with commercial banks. The payment function is currently  performs  in  dealing  with eployees of public entities is temporary and will be gradualyy phased out when new commercial banks commence  operations and offer payment services to the public.The payment function of the BPK will then be to manage an interbank  payment  and settlement system, including a clearing mechanism. The BPK objective is to  promote  a  market based  banking  system, with more banks competing with each other for the benefit of costumers and the economy.The anagement of the  transition period and the preparation for the future permanent functions of the BPK are dependent on the pace at which new banks are licensed and begin to function. Thus far, only the Micro  Enterprise  Bank  (MEB)  is  operating,  opening  in  January  2000.  MEB  is collecting much larger amounts of deposits  than  its  original  business  plan  projected,  and  has  now o pened  branches  in Prishtina, Prizren, Peja, Gjakove and Gjilane. Although the BPK has issued six preliminary licenses to other new banks, so far none has met the necessary requirements to apply for a final license and be permitted  to open their doors. More progress has been made in non-bank financial intitutions and micro-credit  institutions, with  nine  units - all funded  by  donors  or  NGOs- registred so far. Of these, seven provide loans to enterprises and individuals for their business.

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