KS Employers Association: Communal taxes burden the economy, we demand a limit

(Patria) - The Employers Association of Sarajevo Canton is demanding the urgent repeal of decisions by municipal councils on the amount of communal taxes and their enormous increase. Almost all municipalities have increased communal taxes by 500 to 2000 percent, it was announced at a press conference of the KS Employers Association.

The KS Employers Association demands a comprehensive analysis of parafiscal levies, which should be conducted by representatives of the canton and municipalities together with employer representatives, to determine which parafiscal levies have no basis and should be abolished, and which have a purpose and reason for existence.

Furthermore, the KS Employers Association requires a review of the provisions of the Law on Communal Taxes of Sarajevo Canton.

"All municipal councils in the Sarajevo Canton, except for the Novi Grad Municipal Council, have made decisions on the enormous increase in communal tax rates. The KS Employers Association insisted that a limit be set for how much the increase could be, but our appeal was not fruitful, and now we have these decisions that further burden the economy, which has not yet recovered from the crisis caused by COVID-19, and we are also suffering significant consequences from the Russian invasion of Ukraine," said Safudin Čengić, President of the Management Board of the KS Employers Association. 

According to the data presented by representatives of the KS Employers Association, after the decisions of the municipal councils in Sarajevo Canton, the tax for a prominent company of a large company in the Centar Municipality, which last year amounted to 270 to 300 KM, now amounts to 13,500 to 15,000 KM according to the Municipal Council's decision. A similar trend, with smaller amounts, is present in other municipalities, based on which it can be concluded that the increase in the amount of communal tax fees ranges from 414.13 percent in Ilidža to 2,045.35 percent in Centar Sarajevo.

"According to data collected within the project with USAID, employers in Bosnia and Herzegovina pay about 3,500 parafiscal levies, three times more than Serbia and twice as much as Croatia. According to some data, about six percent of BiH's GDP, or two billion KM, is generated precisely from parafiscal levies," said Nijaz Skenderagić, President of the Assembly of the KS Employers Association.

Nihad Imširović, President of the Management of Konzum and Mercator in BiH, emphasized that after the decisions of the municipal councils in the Sarajevo Canton, this company would have to pay 938 percent more in communal taxes for a prominent company this year compared to last year.

"Last year, we paid a total of 19,790 KM in taxes for a prominent company in the Sarajevo Canton. This year, after the decisions of the municipal councils, we should pay 185,700 KM for this purpose," said Imširović.

He warned about the disastrous nature of such decisions, which will force companies like his to close outlets and lay off workers.

"A particular problem is the fact that the size of the company was used as a criterion for determining the amount of taxes. The fact that a company is large does not mean it is more profitable than a smaller one," said Imširović.

The Employers Association organized a press conference within the project "Contribution of Civil Society Organizations to Improving the Impact of Entrepreneurship on Socio-Economic Development of BiH" funded by the European Union.