Session of the House of Peoples of the PFBiH Adjourned: No Conclusions on Contributions and Income Tax

The session of the House of Peoples of the Parliament of FBiH, where delegates discussed the Draft Law on Income Tax and the Draft Law on Contributions, was adjourned after there were not enough delegates in the hall to continue the session. Out of the 54 delegates required for the session, only 26 appeared in the hall after the break, after which a quorum could not be established.

The Speaker of the House of Peoples of the PFBiH, Lidija Bradara, could not say when the session would continue.

Most delegates criticized the government's Draft Law on Income Tax during the day. They believe that adopting this law would lead to a reduction in revenues in municipalities and cantons, where the real sector dominates.

Minister of Finance Jelka Milićević said that the government's goal is to tax high salaries in the Federation, while low salaries would remain untaxed. Salaries up to 700 KM would be outside the taxation system. Salaries up to 1,500 KM would be taxed at 10 percent, and those above 1,500 KM at 20 percent.

Head of the Club of Croats, Tomislav Martinović, said that he supports the reform laws, but that the government must consider that some municipalities and cantons could lose part of their revenue after this law comes into effect, and that a way to compensate for this should be sought.

- Cantons where most workers are employed in the public sector, where salaries are better, would have increased revenues after the law comes into effect, while municipalities and cantons where most people work in the real sector and where salaries are low would experience a drop in revenue - said Martinović.

From the simulation of the new law presented by the government to the delegates, it can be seen that there would be a drop in revenue in six cantons, while in four cantons (KS, HNK, ZHK, and Canton 10), where the public administration of the Federation is concentrated, revenues would increase. Minister Milićević believes that there would be no drop in any canton, because not all parameters were taken into account during the simulation, such as dividends and other types of income.

Delegate Aner Žuljević said that the government's draft of this law is demotivating for married couples because it abolishes personal deductions for family members. Although European countries, as well as neighboring ones, are introducing stimulating measures for married couples with more children, the government's income tax law abolishes such incentive measures.

- We don't even need to talk about the fact that the law stimulates people to no longer keep money in banks because dividends will also be taxed, or that young people are leaving the country because the jobs of so-called 'freelancers', who are now 'selling their brains to foreigners and bringing fresh money into BiH', will also be taxed - said Žuljević.