SDP BiH: New VAT Law Must Consider Businessmen's Demands

SARAJEVO, (Patria) - On the occasion of the announcement that the Management Board of the Indirect Taxation Authority of BiH will hold a session on May 8 to consider the Draft of the new VAT Law, MP in the House of Representatives of the Parliament of BiH Saša Magazinović has once again initiated amendments to the law that are demanded by Bosnian and Herzegovinian businessmen, concerning the change of the VAT payment system.

Magazinović, in cooperation with the Institute for Youth Development KULT, previously launched an initiative supported by around 30,000 businessmen gathered around chambers of commerce and crafts, demanding the introduction of a VAT payment system based on collected invoices, instead of the current system of payment based on issued invoices. It was also initiated to move the VAT payment deadline from the tenth to the last day of the month following the expiration of the tax period, i.e., the previous month.

In addition, an amendment to the Law on the Indirect Taxation Procedure was initiated in the context of reducing the default interest for each day of delay in VAT payment from the rate of 0.04 to 0.02 percent.

At the end of 2017, the Chairman of the Council of Ministers, Denis Zvizdić, supported this initiative to change the VAT payment system, calling it a justified initiative that would lead to an improvement of the business environment in BiH and an improvement of companies' liquidity, while he assessed the request to reduce default interest as an amendment that would significantly reduce costs and facilitate business.

Just one month after Zvizdić's positive stance on the initiative, the Council of Ministers took a contrary stance and expressed a negative opinion on the businessmen's demands to postpone the deadline for VAT payment and reduce the default interest rate for late VAT payments.

Now, with the preparation of the new VAT Law announced, Magazinović believes this is an opportunity to clarify the disagreement between Zvizdić and the Council of Ministers and to incorporate mechanisms into the new Law that will improve the business environment in Bosnia and Herzegovina.

It should be taken into account that the VAT calculation system based on collected invoices is applied in 22 member states of the European Union, and that neighboring Croatia and Serbia also apply such a system.

This amendment, as well as other proposed amendments, would significantly help small and medium-sized enterprises, as evidenced by the enormous support for this initiative from businessmen from all parts of the country, which in no way should be ignored by those who receive salaries from the budget funded by these very businessmen.

The news about the preparation of the new VAT law comes on the day the Annual Meeting of the Board of Governors of the EBRD begins, an event from which much is expected in terms of BiH's future economic development, which, if not a coincidence, should mean that this time the Council of Ministers and the Indirect Taxation Authority will pay much more attention to initiatives coming from businessmen.