Employers appeal to representatives not to support laws on contributions and income tax

SARAJevo, (Patria) - Draft laws on contributions and income tax, along with accompanying laws on accounting and the financial reports register, will be presented to the representatives at today's session of the House of Representatives of the Parliament of the Federation of Bosnia and Herzegovina.

With the proposed laws, the FBiH Government has changed the income tax rates to 10 and 13 percent, stipulating that all income, except for income from capital investments, i.e., dividends, will be taxed at a uniform rate of 13 percent. Three amendments are related to the proposed reduction of the aggregate contribution rate by one index point, i.e., 0.5 index points each for pension-disability insurance and unemployment contributions. In this way, the now proposed aggregate rate of 32.5 percent consists of 18 percent for pension, 13.5 percent for health, and one percent for unemployment insurance.

As this is a tax law that requires implementation from the beginning of the tax period, i.e., the calendar year, the new deadline for its implementation has been set for January 1, 2020.

Employers have also submitted amendments to the draft laws and are seeking support from the representatives. Employers are requesting a reduction in contribution rates for the next four to five years in line with the growth of public revenues, down to the desired 28 percent. The Employers' Association of FBiH claims that these legal solutions will burden the lowest wages.