Businesspeople from FBiH and RS agree: Amendments to the VAT Law are needed now!

The Institute for Youth Development KULT is intensively advocating for amendments to the VAT Law. A signature campaign is underway in support of the process of amending the Law on Value Added Tax of Bosnia and Herzegovina, and the letter of support has so far been signed by around 30,000 businesspeople gathered around chambers of commerce and crafts, as well as associations focused on aiding the economy.

The letter of support is primarily intended for businesspeople, and among the signatories are representatives of the Chambers of Commerce and Crafts from Sarajevo, Banja Luka, Mostar, TK, SBK, USK, PK. Support for the initiative has also been provided by representatives of the Chambers of Commerce of FBiH and RS, the Employers' Association of FBiH, the Association Buy and Use Domestic, and the Association for the Promotion of German-Bosnian and Herzegovinian Economic Relations.

Amendments to the VAT Law are also necessary according to statements by Miro Džakula, Director of the Indirect Taxation Authority of BiH, who spoke on this issue at the recently held „Jahorina Economic Forum 2016.“ As he pointed out, VAT in BiH is based on the sixth directive of the Council of Europe, which has been repealed, and 112 directives are key for this tax in the EU, so our country, as it moves towards the EU, will have to completely change the Law on Value Added Tax.

The Institute for Youth Development KULT advocates for amendments to the Law on Value Added Tax under which taxpayers with an annual turnover of up to one million marks would pay VAT after collecting their receivables, rather than by the 10th of the month, as the current law requires. The amendments would also address the issue of the right to deduct input VAT.

Under current legal regulations, employers are obliged to settle tax obligations even if they have not collected their receivables. This ultimately renders many business entities illiquid and often leads to the cessation of operations.