Hunt for Krnjić because he demands lawful procedure: BiH Court will have the final say on how much RS has damaged the Federation of BiH

(Patria) - The hunt launched against the member of the Indirect Taxation Authority (UIO) BiH Management Board, Zijad Krnjić, after he refused to vote for amendments to the UIO's Rulebook on Internal Organization at an online session, demanding that a regular session be scheduled and that new coefficients for the distribution of VAT revenue between the entities and Brčko District be finally determined, is coming mostly from RS, and the silence of the FBiH Government, which appointed Krnjić as an expert to represent the interests of the FBiH entity, is additionally concerning.

After the Minister of Finance and Treasury, Srđan Amidžić, stated that he would pressure the FBiH Government and send transporters to the FBiH Government because the new Gradiška border crossing would not be opened due to the non-adoption of the Rulebook, Krnjić was supported by the President of the Party of BiH and Mayor of Novi Grad Municipality, Semir Efendić.

Efendić stated that Amidžić himself is refusing to determine new VAT distribution coefficients, which before him were determined every three months for almost 20 years, and that he has thus damaged the Federation of BiH by more than 100 million KM in favor of RS.

“Now he wants to go before the FBiH Government dissatisfied. Let him first schedule a Management Board meeting where decisions on VAT distribution coefficients will be made, which he should have done long ago, and then come before the FBiH Government with those decisions. Also, let him ask his party colleague Tegeltija, the Director of the Indirect Taxation Authority, when he will correct the imbalance to the detriment of Bosniaks in that institution, given that upon taking office as director, he immediately dismissed the regional directors of customs administrations in Banja Luka and Sarajevo who were Bosniaks. Then, with that news, Amidžić can go before the FBiH Government,” Efendić stated.

Efendić emphasized that for years there have been pleas from the Una-Sana Canton for the establishment of new border crossings and the reclassification of existing ones, but to no avail.

“For Minister Amidžić, these are clearly not tricks, but it is normal for him that the state serves only him, his party, and his entity, not all its citizens. It won't work like that,” Efendić stated.

And that Krnjić is right in demanding that new coefficients for the distribution of VAT revenue be determined first is shown by the lawsuit filed by the Federal Legal Protection Office on behalf of the Federation of BiH against the UIO Management Board and the Republika Srpska entity in the Court of BiH.

At the time of filing the lawsuit, the Federation of BiH was damaged by 73,206,821.44 KM, while the actual debt will be determined by financial expertise.

The lawsuit, which Patria has seen, clearly states that contrary to legal provisions and the rulebook, the UIO Management Board for the period 01.01-31.12.2023 and 01.01-31.12.2024 made only one decision on determining temporary coefficients for the distribution of funds from the Unified Account, namely for quarter Q3 (July-September 2023), according to which decision revenue distribution is still being carried out.

The UIO Management Board did not make decisions on determining temporary quarterly coefficients for quarters (October-December 2023) and (January-March, April-June, July-September, October-December 2024), nor decisions on temporary settlements and final settlement, which resulted in temporary coefficients that do not correspond to the actual shares of the entities in final consumption for 2023 and 2024 still being applied in revenue distribution.

The UIO Management Board failed to perform its legally prescribed duty, although all calculations were submitted in a timely manner by OMA. Such an omission directly caused damage, establishing the responsibility of the UIO Management Board,” the lawsuit states.

Stenographic records from the sessions in 2023 and 2024 were submitted as evidence.

Although OMA's proposals were submitted, the Management Board did not include them on the session agenda, and if they did, they were not supported by representatives in the UIO Management Board from Republika Srpska without any argument or objection to the submitted calculations, explains the federal legal representative in the lawsuit.

“This situation led to a surplus of funds allocated to Republika Srpska to the detriment of FBiH in the total amount of 73,206,821.40 KM, and the lawsuit notes that the amount will be finally determined after an expert financial assessment.

The only reason for not adopting the temporary quarterly coefficients for distribution is the obstruction coming from the members of the UIO Management Board from Republika Srpska, all with the aim of preventing the collection of these legally prescribed revenues at a time when the data showed an increase in the Federation's share in final consumption.

RS has been unjustly enriched during 2023 and 2024 by receiving larger amounts of revenue from the Unified Account, and such enrichment is not based on law, a decision of a competent authority, a contract, principles of fairness, nor on a legally relevant basis, whereby FBiH suffered concrete material damage.”

The lawsuit further states that the BiH Constitution clearly stipulates that entities must not obstruct full cooperation between entities and BiH institutions in any way, and in this case, it is a violation of this constitutional norm.

“In the sense of Article 210 of the Law on Obligations, Republika Srpska has acquired property benefits without a legal basis, since due to the non-adoption of decisions on the settlement of indirect tax revenue distribution, it retained a larger amount of funds than it would have received according to the actual economic indicators of final consumption.”

The Federal Legal Protection Office proposes that the Court, after the proceedings are completed, issue a verdict stating that RS has acquired property benefits without a legal basis in the amount of 73,206,821.40 KM.

“The Management Board of the Indirect Taxation Administration is ordered to make decisions on the final settlement of indirect tax distribution for 2023 and 2024 within 30 days from the date of the verdict.

“If the UIO Management Board does not comply within the given deadline, the UIO is ordered to transfer funds from the current indirect tax revenues from the UIO Unified Account belonging to RS to the Federation of BiH account in the amount of 73,206,821.40 KM, along with the corresponding legal default interest from the date the obligation was due until the date of transfer of funds.”

Otherwise, the Management Board of the UIO BiH consists of Srđan Amidžić, Chairman of the Management Board and Minister of Finance and Treasury of BiH, Toni Kraljević, Minister of Finance of FBiH, Zora Vidović, Minister of Finance of RS, Jelena Popović, expert from Republika Srpska, Zijad Krnjić, expert from FBiH, while there is no expert from the Council of Ministers of BiH.