Companies majority-owned by the FBiH Government owe over a billion KM in taxes

Director of the FBiH Tax Administration Šerif Isović, for today's session of the FBiH Government in Mostar, submitted an analysis of the state of the largest tax debtors in the Federation of BiH, with a proposal for measures.

The debt in forced collection as of 31.03.2016 amounts to 2,344,285,100.86 convertible marks. In addition to this, there is also a current debt, which is not yet due for forced collection, in the amount of about one billion KM. Namely, forced collection pertains to debts based on decisions and tax returns that have become final and enforceable. Debts not in forced collection are those determined during tax inspections as additional tax liabilities and debts from tax returns filed on behalf of the taxpayer, which have not become final and enforceable to be collected by force.

Of the total debt, the debt of taxpayers majority-owned by government authorities in the Federation of BiH amounts to 1,111,176,540.62 KM. The largest portion of this debt, 75 percent, relates to social security contributions, with the remainder being other direct taxes.

Looking at it by cantons, the largest total debt was reported by 26 taxpayers in the Sarajevo Canton, totaling 431,103,181.92 KM, while at the top of the list of the 20 largest tax debtors, according to the Tax Administration's records as of 31.03.2016, and who are undergoing forced collection, are JP Željeznice FBiH (198,067,067.03 KM), KJKP Gras d.o.o. Sarajevo (116,647,551.66 KM), and EPBiH JP-ZD Rudnici „Kreka“ d.o.o. (110,555,025.48 KM).

The Tax Administration, in accordance with regulations, has attempted to conclude agreements for deferred payment or payment of debt in installments. However, even with concluded agreements, some taxpayers are not in a position to meet their tax obligations on time.

In previous years, six laws, with amendments, as well as the Regulation on the procedure for financial consolidation of business entities owned by FBiH, were adopted, attempting to help these and other taxpayers through certain incentives, but the goals were not achieved.

Assessing that the situation in this area is difficult and serious, and that the problem of non-payment of tax obligations has been ongoing for almost 20 years, the FBiH Government, determined to find the most optimal solutions, today adopted several binding conclusions.

The FBiH Government has tasked the Federal Ministry of Finance to, within 10 days, prepare amendments to the regulations governing the procedures for forced tax collection, which will allow for an extension of the deadline for concluding deferred payment agreements, or installment payments, for a period of up to ten years.

The FBiH Tax Administration is tasked to also, within 15 days, at the request of the Federal Ministry of Finance, provide data on the tax debts of legal entities, with proposals for possible solutions, taking into account the parameters required by the Federal Ministry of Finance, and which are available to the Tax Administration, relevant federal ministries, and cantonal governments.

The Federal Ministry of Finance is tasked to, within 60 days, submit a report on the situation to the FBiH Government and propose measures that include specific amendments to legal regulations aimed at resolving the problem of non-payment of public revenues by taxpayers.

These conclusions enter into force immediately.