Plea to the Tax Administration to not block accounts: Companies from Livno Canton owe 24 million KM

A meeting was held at the Tax Administration of the Federation of Bosnia and Herzegovina between the acting director of the Tax Administration of the Federation of BiH Šerif Isović and the deputy acting director Slobodan Vukoja with the Prime Minister of Livno Canton Draško Dalić, Minister of Finance Stipan Šarac, and Minister of Labour, Health, Social Welfare and Displaced Persons Dragoslav Topić.    

The reason for the meeting was to improve cooperation between this canton and the Tax Administration of FBiH, and to consider the issue of collecting public revenues from public entities founded by the Canton, it was announced from the Tax Administration, reports the Patria News Agency.

The acting director informed the Prime Minister about the debts owed by business entities in the Federation of BiH, especially those founded by Livno Canton. Taxpayers founded by the Canton have outstanding due obligations in the enforcement collection procedure, as of 31.03.2016, in the total amount of over 24 million marks, of which health institutions account for 14.7 million marks.

Acting in accordance with the applicable regulations, cantonal tax offices have called on all taxpayers to settle their debts or to conclude an agreement on debt payment with the Tax Administration, and if they fail to do so, the Tax Administration will block the accounts of all entities that do not pay their debts or conclude an agreement on installment payments with the Tax Administration on 20.04.2016.

The Prime Minister of the canton expressed concern about the debt situation of public entities and the Tax Administration's announcement to block accounts, as this would jeopardize the operations of public entities that are of great importance to Livno Canton and its citizens.

The Prime Minister informed the representatives that the management of health institutions founded by the Canton has submitted a request to the competent organizational units of the Tax Administration for the write-off of interest in accordance with the Law on the Interest Rate on Defaulted Payments of Public Revenues, and that activities have been initiated to settle the principal debt and create conditions for interest write-off. 

The acting director emphasized that the Tax Administration of FBiH is aware of the potential negative consequences on the business operations of entities whose accounts will be blocked; however, the Tax Administration's task is to accurately determine and collect tax liabilities and to strictly adhere to the laws of the Federation of BiH. The Administration has no right or possibility to selectively apply applicable regulations, to treat taxpayers unequally, or to tolerate non-payment of tax liabilities by taxpayers.

The Tax Administration cannot ask taxpayers to respect the laws and fulfill their tax obligations while not applying the applicable laws itself by selectively blocking accounts and enforcing the collection of public revenues.

The Tax Administration particularly points out to the management and founders of debtors the provisions of the Criminal Code of FBiH (Article 275), which stipulates that the diversion of funds for purposes other than the timely payment of tax liabilities constitutes a criminal offense punishable by imprisonment of up to three years.

In conclusion, it was stated that there is a need for the Government of FBiH and relevant ministries to be involved in resolving these issues in order to find a unified model for resolving overdue public revenue payment obligations, by adopting new regulations or amending existing ones, to enable debtors to resolve their public revenue payment obligations without jeopardizing regular operations.

The Prime Minister of Livno Canton emphasized that he will urgently send an invitation to the Prime Minister of the Federation and the Federal Minister of Finance for active participation in resolving the existing problems and that the Government of FBiH will undertake actions within its jurisdiction to enable debtor taxpayers to realize their initiated activities, while ensuring their normal operations and payment of regular obligations.

Representatives of the Tax Administration stressed that they will enable all debtor taxpayers to pay their overdue obligations in accordance with the provisions of the applicable laws.