IMF Coldly Responds to FBiH Government: No Excise Duties - No Tranche!

The International Monetary Fund is not giving up on the conditions for the disbursement of the seventh tranche of the loan to Bosnia and Herzegovina, despite the catastrophic floods that hit a large part of the country last week, reports the BiH news agency Patria (NAP). However, if the conditions are met, additional funds are possible. 

Namely, the Prime Minister of FBiH Nermin Nikšić and the Minister of Finance Ante Krajina held talks today with representatives of this financial institution and informed them about the scale of the natural disaster. However, the IMF still insists on the adoption of the excise tax law, i.e., the introduction of a levy on cut tobacco.

Only when this is implemented can the new tranche be discussed, regardless of the fact that the country is facing hundreds of millions of convertible marks in damages due to the floods. This law was rejected in the House of Peoples of BiH a few weeks ago, meaning its adoption was postponed. In a statement after today's meeting, Nikšić stated that Ron Van Rooden, the Resident Representative of the IMF, was informed about the situation in BiH.

- The Head of the IMF Mission expressed condolences for the human casualties and concern for the people who lost their homes or had to leave them due to the natural disaster. He promised that the IMF would help Bosnia and Herzegovina in repairing the damage – it was stated. But when it comes to the stand-by arrangement, the IMF is not backing down.

Rooden pointed out the necessity of adopting the Law on Excise Duties on Tobacco Products of BiH as soon as possible, as a condition for the continuation of the Stand-by Arrangement. The need to adopt a legal solution, also at the BiH level, on preventing money laundering was also discussed.

- If the Law on Excise Duties is adopted, there is a possibility that Bosnia and Herzegovina, in addition to the tranche under the Stand-by Arrangement, will be granted additional funds to stabilize the budget burdened by the allocation of funds for repairing the damage from natural disasters. The funds, Van Rooden said, could be operational as early as the end of June or the beginning of July this year – it was announced, reports Patria.