Academic Community Together with Executive and Legislative Authorities in the Fight Against the Grey Economy

SARAJEVO, (Patria) - A Round Table on the topic "Together Against the Grey Economy" was held at the Faculty of Economics of the University of Sarajevo, attended by representatives of the executive and legislative authorities, the academic community, as well as economic experts and members of the Business Council of the Faculty of Economics.

The aim of the Round Table is to initiate a constructive dialogue on the topic of joint fight against the grey economy and to elaborate on the importance of tax policy as an extremely important tool in these efforts.

- The share of the grey economy in Bosnia and Herzegovina is 25%, which does not differ much from the countries in the region, but this still creates the need to find measures and instruments to suppress the grey economy within normal limits. Segments of the grey economy's participation are mostly illegal employment of labor, conducting illegal monetary transactions, and illegal trade in goods and services. Now is the right time to change this situation - stated the Dean of the Faculty of Economics in Sarajevo, Prof. Dr. Kemal Kozarić at the opening of the Round Table.

Mirko Šarović, Minister of Foreign Trade and Economic Relations of BiH, addressed the participants in his introductory presentation.

- In recent years, progress has been made in trade with our key partners, the Ministry has reached certain agreements to minimize the number of barriers and complaints about barriers and to facilitate trade. However, the World Bank's 2018 Doing Business and Competitiveness Ranking ranks Bosnia and Herzegovina 103rd out of 190 ranked countries in terms of overall competitiveness. While countries in the region are among the top 50, Bosnia and Herzegovina is among the last in the region and the last in Europe - stated Minister Šarović.

- The Management Board of the Indirect Taxation Authority (ITA), composed of finance ministers and economic experts at the entity and state levels, is solely responsible for indirect taxation policy. After a complex legislative proposal process, the ITA implements indirect taxation laws. The ITA advocates for transparency, and all cases are open for partnership and resolution. With the aim of better partnership and data exchange, we have initiated cooperation with the entity tax administrations - stated Miro Džakula, Director of the Indirect Taxation Authority of BiH.

The tobacco and tobacco products industry was mentioned as one of the sectors severely affected by the black market, where more than 40% of the tobacco products market is in the grey zone, and the budget loses 200 million KM annually due to this, while the prices of tobacco products are constantly increasing. A change in excise taxes was proposed as a solution to this situation in order to reduce the black market and increase budget revenues.

Within the Round Table program, Dr. Vjekoslav Domljan, President of the Economic Council of the Government of the Federation of BiH, provided an overview of the grey economy situation in our country, and through the presentation of the economic advisor to the Prime Minister of the Federation of Bosnia and Herzegovina, Zlatko Hurtić, participants gained insight into the proposed Action Plan of Priority Measures to Combat the Grey Economy. This document should identify priority short-term activities that need to be implemented in order to reduce the grey economy in the Federation of BiH, especially in the sectors of construction, tourism, and hospitality.