Register of parafiscal levies drafted, but not published: BiH doesn't even know how many taxes it has

Citizens are largely unaware of what the money from the country's economy is spent on. One of these unknowns relates to parafiscal levies, writes Patria.

According to preliminary estimates by employers in both entities, parafiscal levies take close to a billion KM from the BiH economy. Parafiscal levies cost Republika Srpska 190 million KM, excluding equally large local parafiscal levies in this entity. 

No register, and new levies are appearing  

So far, the Government of the Federation has not released the register of parafiscal levies to the public. According to some previous research, there are over 200 different parafiscal levies in BiH in total. At the Federation level, there are talks of 68 parafiscal levies. In mid-December last year, the government promised to complete the register of parafiscal levies as soon as possible. We requested an opinion from the director of the Employers' Association of FBiH, Mladen Pandurević, on the register and the reduction of these levies, but he did not wish to comment.     

Patria's unnamed source, highly knowledgeable about this issue, states that the register of parafiscal levies has not yet been completed, nor has any information about its progress been published. 

“The register is not even being drafted in the relevant ministry but as part of the FAR project (Fiscal Sector Reform Project) financed by USAID, and a prepared register will be made available to the competent authorities. The information I have indicates that the register for the BiH level, entities, and cantons has been prepared for a long time, but for unknown reasons, it is not being published, even though this register is an obligation from the Reform Agenda.” 

Was there enough public discussion on this issue?

“Yes, there have been many discussions and announcements about reducing parafiscal levies, and moratoriums on the emergence of new ones. However, governments in BiH have not yet made any final decisions that would mean a numerical, administrative, or financial reduction of parafiscal burdens. On the contrary, due to budget deficits everywhere, new levies continue to appear, which is completely contrary to the announcements about relieving the economy and improving the business environment,” our source warns.

Most burdened economy in Europe

According to relevant research, the burden on employers in Bosnia and Herzegovina is the highest in the region and among the highest in Europe, amounting to 72.2 percent. For every KM paid, 72 feninga must be paid to the state. With all the parafiscal levies at lower levels, depending on the canton or municipality, employers must pay as much as 90 feninga for every KM of salary paid.

A special issue concerning parafiscal levies relates to problems with investors. 

The Government of the Federation must offer the Register of Parafiscal Levies and a model for the reduction and rationalization of these burdens on the economy. This will also mark the beginning of administrative reform and an introduction to the much more sensitive task for the Reform Agenda, which is public administration reform.