Nikšić admitted: Fiscal laws would hit FBiH Budget

(Patria) - Federal Prime Minister Nermin Nikšić confirmed that the set of fiscal laws significantly reducing payroll contributions would be a significant blow to the Federation of BiH budget and that at this moment it was too great a risk to adopt these laws.

"The government has roughly finalized this set of fiscal laws and reforms. We have not sent it to Parliament because we believe it is too great a risk at this moment. It is very difficult to conduct a quality process, when these laws should come into effect until we resolve the issue of fiscalization. That is, real-time and online fiscalization, because reducing these contributions, regardless of some optimistic announcements, will mean an enormous increase in the number of employees and budget revenue. We believe that this is not a realistic option and that we will initially have a truly significant blow to the budgets, and that we will likely endanger the Pension and Disability Insurance Fund (PIO), and I would say also the Health Insurance Fund, which is why, as serious partners, we must think about how we will secure additional funds in the budget.

We believe that we can realistically plug these holes by bringing what is currently an outflow, such as undeclared work, such as the grey economy, into the budget. The key is complete fiscalization, we are currently working on it, and that is something we will resolve in the coming period," Nikšić said on BHRT.

Regarding the minimum wage, he said that the Government of the Federation of BiH, by decree enabling the payment of two average salaries in the Federation without additional taxation and employer obligations for the next six months, has created a prerequisite for some relief for employers and improvements for workers.

"For example, if these payments are divided over six months and paid out, our workers will have a salary of over a thousand marks, a minimum, and employers will pay less than they will pay when we reduce contributions. So, I believe that by doing so, we have practically created the conditions for workers to have these conditions, a minimum wage of over a thousand marks, of course, this is not regulated by law, we will resolve that in the coming period, but even in this way, we have actually shown, extended a hand to employers, which they, I must be fair, requested for their workers".

However, although the decree allows for payments of KM 2,520, there are no announcements from employers, especially not from the private sector, that they will pay it. So far, only budget users have announced payments.