Magazinović: Paying VAT to the state immediately after issuing an invoice stifles small and medium-sized enterprises

SDP MP in the Parliament of Bosnia and Herzegovina Saša Magazinović said today at a press conference in the BiH Parliament building that he has been seeking for some time for small and medium-sized enterprises to pay VAT after they collect the invoice, not immediately after issuing the invoice, writes Patria.

Magazinović said that many companies run into problems because they have to pay VAT to the state after issuing an invoice, without being sure that they will collect that invoice from their customer. A large number of these invoices are never collected.

- When a small company issues an invoice of 10,000 BAM, it has to pay 1,700 BAM VAT to the state, no later than the 10th of the month. But what happens when that company does not collect those 10,000 BAM from its customer, and that happens too – said Magazinović.
He believes that paying VAT after collecting the invoice, not after issuing it, would be a great relief for small and medium-sized enterprises.

- Entrepreneurs in BiH are struggling, finding ways, employing people, and it is politics that must make their business easier – says Magazinović.

- I know that some companies take out loans to pay VAT. I know of a media outlet whose employees were late with their salaries because they first had to pay VAT – added Magazinović.

Ajka Baručić, an economist from the Institute for Youth Development KULT, says that such a payment system would apply only to small and medium-sized enterprises, but not to large corporations, so as not to jeopardize budget revenues.

Ajka Baručić Photo NAP

She recalled that 22 EU countries apply such a VAT payment system, and from the region, Serbia and Croatia do. The experiences are positive. Baručić also notes that such a VAT collection system is in line with EU norms, and that BiH will implement it sooner or later. Sooner rather than later.

- Companies would have the option to declare whether they want to enter this VAT payment system – says Baručić.

- Also, a threshold would be set for which companies can enter this system and which cannot. In Croatia, these are companies with an annual turnover of up to a maximum of 400,000 euros, in Germany, these are companies with an annual turnover of half a million BAM – says Baručić.