Head of the Association of Employers of the Federation of Bosnia and Herzegovina (FBiH) entity Mladen Pandurevic told N1 that he is ready to bet that the Law on Income Tax and the Law on Contributions will not be adopted. He recalled that the only IMF’s requirement for these two laws is for them to be submitted to parliamentary procedure.

“The first consequence of their adoption would be that the price of labour would increase significantly in the private sector while decreasing in the public sector. All employees with below-average salaries would receive even less money, while those with above average salaries would receive more,” Pandurevic said.

He stressed that it is not true that contributions are thus decreased by 20 percent because the untaxable part should then amount to BAM 800-900 (around EUR 450). According to the new law, the untaxable part of the salary amounts to BAM 700 (around EUR 350).

“We suggested that the un-taxable part be BAM 1,000 (around EUR 500). The salaries would then significantly increase, the social discontent would decrease significantly, and spending would increase,” he said.

The more citizens spend, the more the budget and non-budget funds would receive revenues, Pandurevic added.

The FBiH Government presented the new laws last week, saying they are reform laws and that they would relieve the economy of all the tax burdens, thus boosting employment.

 (EUR 1 = BAM 1.95583)