Hadžić: We could soon pay much more for energy and utility costs

SARAJEVO, (Patria) - We could soon be paying significantly higher prices for energy and utility costs than is currently the case, especially compared to last year, warned economic analyst Faruk Hadžić.

He emphasizes that it is now very important to adopt the right measures at the right time, unlike excise taxes and VAT.

"It is difficult to expect that VAT collection will be abolished on certain products or services, but entities, especially the Federation of BiH, can temporarily reduce the aggregate rate of contributions on labor to 25% of gross salary, legally define that all contracted salaries are in gross amount, and not tax the first 1,000 KM. The effects would be an automatic increase in the minimum wage, additional money for workers during the winter, and reduced pressure on employers to increase salaries, and thus increase the prices of their products and services. Workers would receive higher salaries through tax reductions that the state takes from them," said Hadžić.

Hadžić showed what it would look like in practice:

➜ MINIMUM NET SALARY in FBiH – 540 KM → 680 KM (Gross 907 KM)
(Currently, it is 540 KM net + 367 KM contributions = 907 KM gross)
➜ NET SALARY of 800 KM → 1,028 KM (Gross remains 1,370 KM)
(Currently, it is 800 KM net + 570 KM contributions = 1,370 KM gross)

"There is more than enough money for this measure until the end of the year, because in the first seven months of this year, 935 million KM of indirect taxes (VAT, excise duties, customs duties) and 476 million KM of direct taxes (contributions, income tax, profit tax) MORE have been collected compared to the same period last year. By implementing this measure in the period October – December this year, citizens and the economy are greatly assisted. The employer has no additional expenses, and the worker receives a significantly higher salary. I will preemptively answer questions that will arise, regarding the employer 'taking' this increase for themselves. When the salary is defined in gross amount, then any tax reduction goes directly to the worker's account, without the possibility of the employer doing anything about it," stated Hadžić.