Kraljević announced draft fiscal laws by the end of summer, was the 560 million KM left by Novalić spent?

(Patria) - Federal Minister of Finance Toni Kraljević informed the Government of the Federation of BiH at its session on August 1st about the process of drafting a set of fiscal laws and their submission to the Parliament of the Federation of BiH.

It was emphasized that key activities have been undertaken so far in drafting a comprehensive fiscal reform in the Federation of BiH. The commitment of the Government of the Federation of BiH is to submit these legal solutions to the regular parliamentary procedure during this calendar summer.
Prime Minister of the Federation of BiH Nermin Nikšić and Minister Kraljević informed the Government that the set of fiscal laws includes optimal solutions for achieving three goals, which involve improving workers' standards, relieving entrepreneurs, and maintaining fiscal stability.

The fiscal policy measures of the Government of the Federation are based on the continuation of reform activities in five most significant segments. These are reducing the burden of labor, as well as restructuring tax burdens, then improving the provision of public services, combating the informal economy, and continuously improving coordination and fiscal responsibility between all levels of government in FBiH.

Furthermore, preserving financial stability, strengthening sustainable, efficient, and stable economic growth, as well as increasing the competitiveness of the economy were stated as important.

The Federal Ministry of Finance is intensively working on a set of legal solutions that will reconcile both sides, employers and employees, while simultaneously ensuring the unimpeded payment of guaranteed rights for pensioners and social categories. Given that these are systemic laws, it was emphasized that it is necessary to open a broader public debate so that everyone has the opportunity to submit amendments and present their proposals. This set of laws should create prerequisites for a new economic and investment cycle that is needed by all citizens.

After the drafts of these reform laws are submitted to the parliamentary procedure, all interested parties will be able to participate in the public debate, all in order to arrive at the best solutions.

This was the information communicated by the Government of FBiH.

Translated, there will be nothing from fiscal laws until the end of September. And that means that they will only be submitted to the procedure in draft form, then go through public debate, and only then be adopted as proposals. This procedure will certainly not be completed by the end of this year, and perhaps not even started.

According to Patria's information, the Ministry of Finance of FBiH is concerned about the deficit that would arise in the FBiH budget if contribution rates are reduced, which is key in the Law on Contributions. The government of former Prime Minister Fadil Novalić was also working on these reforms and had left around 560 million KM for these purposes to bridge any potential deficit. At that time, the proposed contribution rate was around 33 percent. However, the then Minister of Finance Jelka Milićević (HDZ) said that the minimum rate simulated in the Ministry of Finance of FBiH was 33.5 percent.

Nermin Nikšić's government has emptied the treasury and started to borrow further.

Therefore, the fear that there will be a lack of money in the budget for budget users, pensioners, social benefits, and healthcare is justified.

In this whole chain, workers and employers are clearly the last links.

Although employers from all sectors are facing a shortage of workers, they cannot be competitive with foreign companies due to high tax burdens. Any increase in wages for workers is a significant cost for employers.

However, it seems that the Government of FBiH is more willing to allow a large number of foreign workers to come rather than enable domestic workers to earn more.

Nikšić's government has increased social benefits, introduced the right for mothers to a one-time benefit of 1000 KM for each newborn child, and wages have also increased, all of which have burdened the budget. Despite warnings from international financial institutions that public administration must be reduced and reformed, the administration is accumulating daily.