Indirect tax revenues in FBiH down 10 percent compared to 2019

SARAJEVO, (Patria) - The Federal Government accepted the review of tax and contribution revenue collection in FBiH for July 2020.

In this month, the available portion of indirect tax revenues from the Single Account for budgets at all levels of government and road administrators in the Federation of BiH amounted to approximately 282 million KM. Compared to June 2020, these revenues are higher by 49 percent or 92.8 million KM, which shows a continuation of the recovery trend after significantly weakened collection in April and May caused by the impact of the COVID-19 pandemic on economic flows.

Although an upward trend was established within 2020, collection in July has not yet reached the recorded trend from the same month of the previous year. Thus, revenues in July this year, compared to July 2019, are lower by 10.5 percent or 33.2 million KM. Regarding the distribution of available indirect tax revenues to beneficiaries in FBiH, 102 million KM were allocated to the Budget of the Federation of BiH in July 2020, which is 12 million less than in the same month last year. The total portion of revenues for distribution to cantonal budgets amounted to 144.4 million KM and is 17 million KM lower. Available indirect tax revenues for distribution to municipal/city budgets amounted to 23.7 million KM, which is 2.8 million KM less compared to the same month of the previous year.

When we look at the total available portion of indirect tax revenues from the Single Account for the period 1.1. - 31.7.2020, compared to the same period in 2019, a negative trend is still present. Total collection amounts to 1,503.4 million KM and is ten percent lower compared to the same period of the previous year.

In July 2020, 16.3 million KM were allocated to the Federation of BiH for dedicated road tolls for highway construction and the construction and reconstruction of other roads, which is 4.6 percent less compared to the same month in 2019. In the first seven months of this year, total allocated revenues from dedicated road tolls for FBiH amounted to slightly more than 111 million KM, and are 3.8 percent or 4.4 million KM lower compared to the same period of the previous year.

Total collected corporate income tax revenues in FBiH in July 2020 amounted to 28.6 million KM and are 11.7 percent or 3.8 million KM lower compared to the same month in 2019. Total corporate income tax revenues in the Federation of BiH amount to 213.7 million KM, with a decrease of 12.1 percent or 29.4 million KM.

Total paid income tax revenues in July 2020 amounted to approximately 35 million KM and, compared to collection in June, are higher by six percent or slightly more than two million KM. After significantly reduced collection in April, these revenues are again moving upwards, and the July performance also supports the current maintenance of such a trend. Compared to July 2019, income tax revenue performance in July 2020 is higher by 0.8 percent. In accordance with the provisions of the Law on the Allocation of Public Revenues in FBiH, municipalities/cities are entitled to a minimum of 34.46 percent of the total collected income tax revenues, or 1.79 percent to municipalities in the Canton of Sarajevo, and cantons can allocate a larger amount than the minimum prescribed to municipalities/cities within their jurisdiction through their regulations. Thus, in July 2020, cantons allocated a total of approximately 8.5 million KM of income tax revenues to municipal/city budgets.

For the period 1.1. - 31.7.2020, total collected income tax in FBiH amounted to 237.7 million KM and is 2.4 percent lower compared to the same period in 2019. In July 2020, total revenue collection from contributions for pension and disability insurance, health insurance, and unemployment insurance amounted to 329.3 million KM. Of this, 298 million KM relates to direct payments by taxpayers, which is 1.2 percent lower compared to the performance in July 2019.

The remaining 31.3 million KM relates to subsidies for mandatory contributions for April 2020, paid from the Budget of the Federation of BiH in July 2020 for employees of business entities and self-employed entrepreneurs whose business activities were disrupted by the pandemic, and who met the conditions in accordance with the provisions of the Law on Mitigating Negative Economic Consequences.

For the period 1.1. - 31.7.2020, total revenues from contributions amount to 2,039.8 million KM and are 2.3 percent lower compared to the same period in 2019.