Nikšić and Trojka parliamentarians stumble in selling a false promise to workers: Where is the Income Tax Law stuck!?

By Rasim Belko @rasimbelko

Sessions of both houses of the Parliament of the Federation have been postponed, dates have been changed several times, without anyone explaining to the public what it is about and why it happened.

The only and meager explanation was that the postponement was a consequence of the request from the Government of the Federation of BiH. And the request from the Government came because of the Bill on Amendments to the Income Tax Law. This is a legal solution from the Government of the Federation proposed under a shortened procedure.

According to the explanation provided with the Bill, it states: “The Law on Amendments to the Income Tax Law ensures the implementation of one of a series of measures to relieve employers as soon as possible, immediately from the day of its application, 01.01.2025.”

However, judging by the information obtained by Patria, problems surrounding this legal solution have forced the Government of the Federation to ask the House of Representatives and the House of Peoples of the FBiH to postpone sessions in order to secure support for this legal solution and try to resolve disagreements.

But the problems are clearly not small, and they are currently mainly rooted in disagreements within the political project of Trojka as a factor in power.

Namely, amendments have also been submitted to the proposed law under a shortened procedure. One came from the Our Party Club, and it states the following: “In the Bill on Amendments to the Income Tax Law, in Article 1, point 7), after the word: ‘employee’, the words: ‘paid exclusively’ are added, then after the word: ‘on account of’ the word: ‘increase’ is added, and the words: ‘up to KM 200.00’ are changed to the words: ‘up to KM 400.00’, so that point 7) reads:

“7) monetary compensation paid exclusively to the employee on account of an increase in the part of the salary for work performance in accordance with the current labor regulations, up to KM 400 per month, for the period from the date of application of this law until December 31, 2025.”

Our Party Amendment

Our Party states that the primary goal of the aforementioned amendment is “to prevent the abuse of this legal provision”.

A similar amendment was submitted by the Party of Democratic Action: “In Article 10, paragraph (4), point 7 of the Income Tax Law, instead of the words ‘KM 200.00 per month’, the words ‘KM 500.00 per month’ are added.”

NiP states in its explanation: “Increasing the non-taxable income portion to KM 500 per month would allow employers more room to increase workers' net salaries, as this measure has the potential to reduce the grey economy, encourage the registration of workers, and increase budget revenues through increased consumption. Furthermore, exempting a larger portion of income from tax would directly impact the improvement of employees' quality of life, which is crucial in the current context of inflationary pressures.”

Party of Democratic Action Amendment

Knowing that an amendment as such represents an improvement to the existing, and in this case, new law, it is clear that Our Party and the Party of Democratic Action are not satisfied with the law that came from the Government of the Federation in the form of a proposal.

In that case, the Government and Prime Minister Nermin Nikšić would not have enough votes to pass the proposed legal solution. And that is the primary reason for postponing the sessions where the consideration of several laws and decisions was planned.

Why the Trojka bloc could not agree on a legal solution, knowing that ministers from SDP, Our Party, and the Party of Democratic Action are in the Government of the Federation, remains a question.

How much Nikšić's talks with the Employers' Association of FBiH influence all of this is also unclear, and at the same time, we have silence from HDZ BiH as if the mentioned law does not concern them.

We remind you that the responsible minister, Vojin Mijatović, said after the Government of the FBiH submitted the Bill on Amendments to the Income Tax Law that: “the salary will not be KM 1,000 from January 1st this time either, but no employer will be able to pay less than KM 1,200, depending on how much it will be exactly when we adopt the amendments.”

Adnan Smailbegović, president of the Employers' Association of FBiH, reacted to this, stating that Mijatović confused employers and that they are awaiting the opinion of legal experts.

Whether the current government is playing the game of Chinese whispers or if there is something else entirely remains to be seen. Workers will wait for the mentioned sessions and expect information on whether their guaranteed salary from January will be 1200 or not.

Nikšić is trying to balance between politics, employers, workers, and a difficult financial year. However, the fact is that this unwritten rule, that the government finds it hardest to agree on citizens' rights, is confirmed once again.

And those rights, according to the proposed legal solution, could lead workers into problems, who will be caught between dismissals and lower coefficients and salaries.

In essence, Nermin Nikšić's government is offering workers a false promise before the New Year's holidays.

The only question is whether the deputies of the ruling majority in the Parliament of the Federation will agree to be fake Santas. Judging by the postponements of the session, for now, they are not ready for that!