VOICE OF SMALL BUSINESSES: Urgent measures to save crafts, small businesses, and 262,000 jobs

SARAJEVO, (Patria) - The Facebook group Glas malih biznisa (Voice of Small Businesses), launched by Ejub Kučuk, owner of the marketing agency MITA and the Bonjour bakery chain, has gathered in just a few days 25,000 owners and employees of crafts and small businesses in Bosnia and Herzegovina. They have submitted proposals for urgent measures to save crafts, small businesses, and 262,000 jobs. The agreed-upon measures have been sent to four levels of government – state, entities, cantons, and municipalities. Business owners have been waiting for days for the government's plan for salvation or relief for businesses. Many have already laid off hundreds of workers, and the real figures will only be known at the end of April. Many employers are in fear and do not know how to pay their employees' salaries. Some have already reduced salaries, and some will not pay them until they see if the authorities will introduce any relief measures.

"As you know, a large number of craftspeople, micro and small firms have been affected by the measures adopted by the Crisis Staffs at all levels due to the COVID-19 pandemic. Most of them have been completely banned from operating, and companies that are allowed to operate (food, pharmacies, bakeries...) are experiencing a sales drop of -30% to -50% due to the movement ban for children and the elderly over 65, as well as due to special operating procedures (distancing, special cleaning and protection measures, only one customer in the store with the salesperson, etc.).

Fairness and symmetry, which imply the same measures for all businesses that regularly settled all their obligations to the state before the crisis, will reduce approval procedures and preserve the ecosystem, enabling a quick economic recovery after the epidemiological crisis subsides. We are very concerned about the slow resolution of the problems faced by businesses, as well as asymmetric solutions that would cover only certain parts of the economy and condition the retention of employees in their jobs, given that the government is three weeks late with measures. Not only tourism, hospitality, and hotels are affected, but all industries equally; wood, processing, textile, service industries, dental practices, kindergartens, foreign language and dance schools, marketing and advertising, media, bakeries, and pharmacies (although they are not banned from operating) due to reduced turnover with full labor costs and the risk of COVID-19 infection, agriculture, culture, art, event organization, photographers, catering, wedding organizers, in a word, ALL who have registered activities," the statement said.

To strengthen the financial structure of companies, maintain liquidity, encourage payments within the economy, and enable business owners to pay salaries and retain employees in their jobs, thereby reducing the significant loss of jobs, the Council of Ministers of BiH and the Parliamentary Assembly of BiH are requested:

"To amend the VAT Law or adopt a DECISION WITH THE FORCE OF LAW that will define the obligation to calculate and pay VAT upon collection of invoices, instead of the current practice of calculating VAT on all issued invoices that may not be paid, even those for which court proceedings are ongoing or which have been written off after the statute of limitations for claims.

To strengthen the financial structure of companies, maintain liquidity, encourage payments within the economy, and enable business owners to pay salaries and retain employees in their jobs, thereby reducing the significant loss of jobs, the authorities in the Federation of BiH are requested to change laws or adopt a decision with the force of law whereby all economic entities and crafts that have duly paid taxes and contributions by March 2020 will:

1. Be exempted from paying taxes and contributions on salaries, in such a way that the Government of the FBiH, together with the Cantons, takes over the payment of contributions, income tax, and health insurance for all employees without exception during the period March-May 2020 + 90 days from the date of termination of the declared state of natural or state of emergency. This avoids paying money to companies; funds are paid for all employees in the FBiH into designated accounts, and jobs are fully protected.

2. Exempt all craftspeople from paying lump-sum taxes on salary payments during the period of work ban and special operating conditions (at least for the period from March 1, 2020, to May 31, 2020, with the possibility of extension for another three months).

3. Exempt all companies, without exception, from paying profit tax for 2019, given that a decline in economic activity and business losses are expected during 2020, so the profit from 2019 will be needed to cover losses exceeding the paid-in capital.

4. Exempt all companies, without exception, from paying advance profit tax for 2020, given that the economy will experience a decline in business and operate at a loss due to the decline in economic activity and consumption. The collection of advance profit tax under these operating conditions during 2020 is outright extortion and harmful state action on the business operations of companies.

5. Exempt all companies, without exception, from paying all utility fees and parafiscal charges; forest fees, water fees, tourism fees, prominent company fees, anything that does not contribute to the survival and preservation of companies in BiH.

6. Pass a mandatory moratorium on loan installments during the state of emergency/natural disaster + an additional 90 days from the date of termination of the state of natural disaster/state of emergency for all natural and legal persons, except for those who explicitly request to continue paying loan installments (the current solution implies that the bank can decide who to grant a moratorium to).

7. Issue an Order to legal entities from the Public Sector to make payments to companies with which they have signed contracts, by immediately paying in full for already realized deliveries without bureaucratic delays, and to pay for work not fully completed according to the temporary situation in accordance with the degree of contract execution.

8. Subsidize at least 50% of net salaries for crafts, businesses, and all other sectors that are completely banned from operating during the state of emergency/natural disaster, based on payrolls from February 2020.

9. Ensure minimum income for all natural persons who earned income based on work contracts in BiH or abroad, and who reported all income and paid legally prescribed taxes by February 29, 2020.

10. Ensure the smooth operation of FIA or exempt all freight forwarders and road carriers from advance payment of federal tax (FIA is closing from April 1, and freight forwarders and carriers are appealing for the federal tax, which freight forwarders use several times a day, to be paid in advance in a larger amount).

11. IMMEDIATELY unblock funds intended for shelter construction and transfer them to a special fund for business assistance.

12. IMMEDIATELY redirect 100 million marks that federal and cantonal institutes have in their accounts for new employment projects to assist businesses and preserve new jobs.

Cantonal authorities are required to make decisions within 3 days:

1. CONTRIBUTIONS - Subsidize or take over the payment of contributions, income tax, and health insurance for all employees in the Canton without exception during the period March-May 2020 + 90 days from the date of termination of the declared state of natural or state of emergency. This avoids paying money to companies; funds are paid for all employees in the Canton into designated accounts, and jobs that remain are fully protected.

2. LUMP-SUM TAXES FOR CRAFTSPEOPLE - Subsidize lump-sum tax payments for all craftspeople without exception during the period March-May 2020 + 90 days from the date of termination of the declared state of natural or state of emergency.

3. LOANS - In case a full moratorium on loan payments is not adopted:

- Take over the loan installments of economic entities in the Canton without exception during the period March-May 2020 + 90 days from the date of termination of the declared state of natural or state of emergency, as part of public debt, for both employees and entrepreneurs.

- Cover the full cost of interest for all business entities and entrepreneurs affected by the crisis if they take out a loan to restart their business after the epidemiological crisis (example: if a hairdresser or other entrepreneur, who cannot currently operate, takes out a loan from a bank after the crisis ends to restart operations or settle obligations for salaries and other expenses, the City will pay all interest on that loan).

4. UTILITY FEES - Exempt all companies, without exception, from paying all utility fees and parafiscal charges for which the Canton is responsible.

5. FEES - Exempt all companies from fees for summer gardens and rental of public areas, including fees for advertisements on outdoor advertising media during the state of emergency/natural disaster and an additional 90 days from the date of termination of the state of natural disaster/state of emergency.

6. RENTAL OF BUSINESS PREMISES

- Exempt all legal entities from paying rent for premises owned by the Canton during the state of emergency/natural disaster + an additional 90 days from the date of termination of the state of natural disaster/state of emergency.

- Recommend private landlords to waive rent for business sectors or reduce it by at least 50% during the period March-May 2020 + 90 days from the date of termination of the state of natural disaster/state of emergency.

7. PAYMENT DEADLINES - Make payments to companies with which the Canton has signed contracts, by immediately paying in full for already realized deliveries without bureaucratic delays, and to pay for work not fully completed according to the temporary situation in accordance with the degree of contract execution.

8. SALARIES - Subsidize at least 50% of net salaries for crafts, small businesses, and other legal entities that are completely banned from operating during the state of emergency/natural disaster.

9. MINIMUM INCOME - Ensure minimum income for all natural persons who earned income based on work contracts in BiH or abroad, and who reported all income and paid legally prescribed taxes by February 29, 2020.

10. AGRICULTURE - Analyze and identify all agricultural areas in the Canton that can be leased free of charge to interested farmers and companies, create a sowing plan for crops that grow best in that area, provide seeds, fertilizer, and ensure the purchase of all surpluses.

Municipalities are required to make decisions urgently, and no later than 3 days:

1. Exempt all companies, without exception, from paying all utility fees and parafiscal charges for which the Municipality is responsible.

2. Exempt all companies from fees for summer gardens during the state of emergency/natural disaster + an additional 90 days from the date of termination of the state of natural disaster/state of emergency.

3. Exempt all legal entities from paying rent for premises owned by the Municipality during the state of emergency/natural disaster + an additional 90 days from the date of termination of the state of natural disaster/state of emergency.

4. Make payments to companies with which the Municipality has signed contracts, by immediately paying in full for already realized deliveries without bureaucratic delays, and to pay for work not fully completed according to the temporary situation in accordance with the degree of contract execution.

5. Subsidize at least 50% of net salaries for crafts, small businesses, and other legal entities that are completely banned from operating during the state of emergency/natural disaster.

6. Ensure minimum income for all natural persons who earned income based on work contracts in BiH or abroad, and who reported all income and paid legally prescribed taxes by February 29, 2020.

7. Analyze and identify all agricultural areas in the Municipality that can be leased free of charge to interested farmers and companies, create a sowing plan for crops that grow best in that area, provide seeds, fertilizer, and ensure the purchase of all surpluses.

"We hope that you will understand the seriousness of the situation in BiH and the importance of preserving the BiH economy and jobs that have been created with great difficulty over decades. The list of crafts and small businesses supporting this initiative can be found in the attachment," said Glas malih biznisa.

They note that there are 27,000 small businesses and 48,000 crafts registered in BiH with nearly 350,000 employees. Of these, 262,000 jobs are at risk, which would paralyze BiH at all levels in a very short period.