Benefits for the real sector: Isović proposed 11 points to save the economy

Relevant institutions in BiH are considering a series of measures that need to be taken to mitigate negative economic consequences.

To resolve the economic aspect of the coronavirus pandemic in the Federation of BiH, it is necessary, according to the Director of the Tax Administration of FBiH, Šerif Isović, to implement a series of measures, which he summarized in 11 key points.

The proposed measures are the result of an analysis of the current situation and projections of the pandemic's consequences, within the framework of daily cooperation and communication between the Tax Administration of FBiH, the Government of FBiH, and business entities.

Measures proposed by the Director of the Tax Administration of FBiH, Šerif Isović, are as follows:

1. I propose urgent amendments to the Law on Budgets and Budget Execution, which will enable all unspent earmarked and non-earmarked funds in the accounts of the budgets of FBiH, cantons, and municipalities for projects that have not been started or for which invoices and orders to suppliers have not been issued to be released and made available to taxpayers as short-term interest-free loans for salary payments and procurement of food items (according to official data, there is more than one billion KM of these funds in commercial banks).

2. Urgently amend the VAT Law and prescribe a deadline for submitting VAT returns and paying VAT by the end of the month for the previous month, and exempt medical equipment and medicines from VAT until the state of emergency is declared over, or introduce quotas.

3. Urgently amend the Law on Income Tax and the Law on Contributions and enable salary payments without the payment of income tax and contributions for all employers whose operations are prohibited and who have a revenue drop of more than 20 percent, provided they do not lay off workers for the months of February, March, and April. Income tax and contributions for these months should be paid by June 30, 2020, or within 60 days from the date of the declaration of the end of the state of emergency in FBiH.

4. Exempt all taxpayers whose operations are prohibited from paying advance profit tax for the months of March, April, and May 2020, or for the months until the declaration of the end of the state of emergency in FBiH, plus 30 days.

5. Urgently amend the Law on Default Interest on Public Revenues and prescribe a moratorium on the calculation of default interest on public revenues for a period of three months, or within 60 days from the date of the declaration of the end of the state of emergency in FBiH, and reduce the interest rate from the current 14.6 percent per annum or 0.04 percent daily to a minimum of 10 percent, which is the same as the default interest rate for debt-creditor relations in the economy.

6. Urgently amend the Law on Banks and prescribe a moratorium on loan repayments for the duration of the measures, or for a period of at least 60 days without the right to charge any interest or costs during this period. Also, prohibit banks from withdrawing cash from BiH until the declaration of the end of the state of emergency in FBiH. Cash withdrawals should only be allowed with the consent of the Central Bank of BiH.

7. Urgently amend the Law on Salaries of Civil Servants and reduce salaries by, for example, ten percent, and direct these funds to the economic recovery fund.

8. Urgently amend the Law on Public Enterprises and stipulate that entities whose operations are prohibited can pay their invoices for the months of March, April, and May without the calculation of default interest within 90 days, or pay 50 percent of the invoice and the remainder within 90 days from the date of the declaration of the end of the state of emergency in FBiH.

9. Introduce a suspension of deadlines for all administrative and other proceedings that are due from March 19, 2020, to April 15, 2020, or during the declaration of the state of emergency in FBiH, plus ten days, after which the deadlines will normally resume.

10. Extend all deadlines for submitting all tax returns by 60 days, or during the declaration of the state of emergency in FBiH, plus ten days.

11. Suspend all public sales of assets in forced collection until May 31, 2020, or during the declaration of the state of emergency in FBiH, plus 20 days.