UK and Kalamujić Announce Revision of Weighting Factor for Sarajevo Canton: VAT Revenue Shortfall Significantly Impacts Budget

(Patria) - Prime Minister of Sarajevo Canton Nihad Uk and Minister of Finance of CS Afan Kalamujić held a press conference today where they stated that the reduction of the weighting factor is the main culprit for the Canton of Sarajevo finding itself in financial problems. The Canton of Sarajevo lost about 100 million KM in VAT revenue in 2024.

They announce that the same situation follows in 2025, when they will have 130 million KM less.

“When planning the budget, we were aware of all the financial circumstances that awaited us in 2024, and at no point was there any doubt about the direction in which the financial path should be paved. The weighting factor is to blame for CS finding itself in the financial challenge that occurred in 2023, is occurring in 2024, and will occur in 2025. It was up to us to choose whether to create the budget cowardly, to adapt it to that weighting factor, in a way that our colleagues from FBiH took 97,300,000 KM from our revenue last year, or to proceed bravely. We decided on the latter option, not to reduce benefits and quality of life. There was an option to reduce maternity benefits, not increase salaries in CS, to reduce subsidies for kindergartens – we did not want that,” said Uk.

He stated that they are working on the Budget Rebalance, which will soon be on the agenda of the CS Assembly, and already on the Draft Budget for 2025. He assured that “there is no fear that all legal obligations – from salaries, subsidies to benefits – will be denied this year.”

Kalamujić stated that they plan to initiate discussions about the revision of the weighting factor, i.e., the distribution of indirect tax revenues in FBiH. The Government will forward the document to the CS Assembly, and thus to the Parliament of the Federation of BiH, in order to overcome this problem.

Speaking about the deficit, he said that deficits have been recorded in CS budgets for years, except for 2022. Economic growth contributed to their revenue, but this year, Kalamujić points out, there has been a decrease in economic activity in the second half of 2024.

“We have the consequence of the halt in employment, even a decline in certain areas, and the non-realization of income tax. We will review the revenue situation and see what challenges lie ahead of us,” Kalamujić stated.

He assured that salaries and social benefits paid from the budget will not be endangered.

“The Government will address the issue of the deficit in the 2025 budget, and I hope that together with our colleagues from the Government, we will have understanding and address it in the best possible way so that citizens do not feel the consequences,” Kalamujić concluded.