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Yugoslavia Government Revenue and Spending
Most federal revenue was collected in the form of turnover
taxes and assessments by local and federal self-management
communities of interest, which had financial management
responsibility for social services such as education, health, and
pensions. Because a large portion of the national budget was
committed to social services, levies by the communities of
interest were an important part of the tax structure. The
republics and provinces and the communes also levied taxes; their
main revenue sources were the same as those of the federal
government, but they also taxed income and personal property. The
last two categories provided little income, because the minimum
income level on which income tax was collected was very high.
Personal property taxes were collected mostly on private homes
(see Housing
, ch. 2). Peasants and private businesses were taxed
on assessed incomes, often at very high rates that discouraged
individual economic initiative. Constitutional reform aimed at
restructuring the tax system to eliminate such restrictions.
In 1987 the government purchased 41 percent of Yugoslavia's
social product (see Glossary) through large expenditures on
defense, government administration, and social services (see
table 11, Appendix). Social services received an unusually large
allotment for a country of Yugoslavia's modest resources. Defense
took about 46 percent of federal outlays budgeted for 1990,
because of Yugoslavia's policy of maintaining security and
integrity as a nonaligned state
(see
Threat Perception;
Military Budget
, ch. 5). Other major
federal expenditure
categories were education and aid to underdeveloped regions.
The 1974 Constitution virtually eliminated direct federal
expenditures on investment. Partly for this reason, in 1990 the
federal government accounted for only one-quarter of total
government spending in Yugoslavia. The remainder was disbursed by
authorities at the republic or commune level.
Data as of December 1990
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