Indirect Taxation Authority Steering Board Never Adopted Revenue Allocation Methodology, Džakula Shifts Everything to Entities!

(Patria) - Miro Džakula, Director General of the Indirect Taxation Authority of BiH (ITA), is demanding that the entities, i.e., the Governments of FBiH and RS, agree on settlements, or rather revenue allocation, bypassing legal rules and the Constitution!

The Prime Minister of the Federation, Fadil Novalić, will certainly not agree to this derogation of state authority and transfer of competencies to lower levels, because the ITA exists precisely because the Law on the Indirect Taxation System in BiH established the ITA as an independent administrative organization in accordance with the Law on Ministries and Other Administrative Bodies of BiH and the Law on Administration of BiH, which implements legal and other regulations on indirect taxation and the policy set by the Council of Ministers of BiH upon the proposal of the Steering Board.

Therefore, the Steering Board is obliged to determine the methodology for allocating road tolls for highways and other roads. The Steering Board of the ITA prescribes this methodology by a special act. Since this has never been done, an attempt is being made to shift the burden to the entities, but they have no authority to agree on this.

The law does not recognize what the Steering Board is persistently doing. Namely, instead of a methodology that would prescribe the method of calculation and allocation of revenue, they adopt a Decision on the temporary allocation of road toll revenue, which, in a completely arbitrary and unfounded manner, determines only the percentage of revenue allocation between the Federation, RS, and Brčko District of BiH. There is never a concrete explanation as to why it is always a temporary decision.

Jelka Milićević, the Minister of Finance, is by rule a member of the ITA Steering Board, as is her party colleague and state Minister of Finance, Vjekoslav Bevanda, who heads the Steering Board, and both are from the HDZ. Director Džakula is also from the Croat constituent people, enjoying the support of the HDZ. Considering this triangle and the connection of their leader Dragan Čović and Milorad Dodik, the climate within the Steering Board is clear. They, like the Minister of Finance of RS, Zora Vidović, have veto power in the ITA Steering Board.

And, as things stand, everything is being done to the detriment of the Federation. A court ruling, which is practically unenforceable, states that the Authority will carry out the settlement by the end of 2020, but no one knows how to do it, nor from which funds.

Finally, the Steering Board of the Indirect Taxation Authority recently adopted the Decision on the first temporary settlement between the beneficiaries of indirect tax allocation from the ITA's Single Account for 2020, according to which the Federation of BiH is obliged to pay Republika Srpska 32,378,372 KM.

ALLOCATION

The principles of indirect tax allocation are prescribed by the Rulebook on the calculation of coefficients for allocation to entities. Information on temporary settlements between entities can be observed and analyzed in three periods since the establishment of the ITA BiH. The first period covers 2005, 2006, and 2007, when the ITA Steering Board made decisions on settlements in favor of RS totaling 54,870,243 KM. The second period covers 2008, i.e., the second temporary settlement until the first temporary settlement in 2020. In the mentioned period, there were delays in the adoption of ITA Steering Board decisions based on which settlements were realized in the amount of 27,425,331 KM in favor of the Federation and 78,184,514 KM in favor of RS.

The decisions were made on September 7, 2011, and August 31, 2012, and realized on September 14, 2011, and September 5, 2012. The ITA realized these decisions within the legally prescribed period of 30 days from the date of adoption.

Due to the delay in adopting the settlement decision, RS initiated legal proceedings against the ITA. The lawsuit is unfounded because the ITA could not have carried out the mentioned settlements as the Steering Board had not made a decision on their realization.