Draft Budget of FBiH for 2022 Determined, Urged for Adoption under Urgent Procedure

(Patria) - The Government of the Federation of BiH, at today's session in Sarajevo, determined and sent to the FBiH Parliament the Draft Budget of the Federation of BiH for 2022 in the amount of KM 5,535,108,213, which is KM 53.8 million more compared to 2021.

The structure of the proposed Budget for 2022 is characterized by an increase in tax revenues, especially from pension and disability insurance contributions, and indirect taxes. On the other hand, an increase in capital transfers and expenditures for the procurement of fixed assets is planned. The favorable situation with revised revenue projections, as well as lower planned expenditures, contributed to a significant decrease in planned revenues compared to the previous fiscal year.

Thus, total tax revenues projected in the Budget for 2022 amount to KM 3,947.6 million, an increase of KM 441.5 million or 13 percent compared to the previous year. This particularly applies to revenues collected from MIO contributions, planned at KM 2,219 million, and indirect tax revenues from the single account of KM 1,661.6 million.

Receipts from financial assets and borrowing are planned in the total amount of KM 920 million. On the expenditure side, expenditures for materials, small inventory, and services have increased by KM 41.5 million compared to 2021. Within this, the most significant increase of KM 30 million relates to the procurement of COVID-19 vaccines.

Current transfers and other current expenditures for 2022 are planned in the amount of KM 3,695.1 million, a one percent increase compared to 2021. A review of individual economic codes for current transfers to other levels of government and funds within the scope of the Federal Ministry of Culture and Sports highlights transfers for cinematography, for sports of significance to FBiH, and a transfer to the Foundation for Library Activity, planned in the total amount of KM 7.2 million. Furthermore, within the scope of the Federal Ministry of Education and Science, a new transfer of KM 5 million is planned for the completion of the construction of the Secondary School Center building in Travnik.

Within current transfers to individuals, under the scope of the Federal Ministry of Labour and Social Policy - Current Transfers to Individuals - the Law on Family Support with Children in the Federation of BiH envisages KM 32.5 million for the payment of child allowance from the federal budget.

The transfer from the Federal Ministry of Displaced Persons and Refugees has been increased by six million KM, of which, within the capital transfer for co-financing projects in the Srebrenica region, a special item of KM 1,000,000 is planned for financing the Srebrenica Memorial Center. In addition to the above, within the scope of the Federal Pension and Disability Insurance Institute, an increase in funds for pension payments of KM 102.3 million is planned compared to the previous year. The practice of support through subsidies to public enterprises such as Željeznice FBiH, airports, and for linking work experience, as well as to Elektroprivreda BiH for electricity cost subsidies, has continued.

In addition to direct subsidies to private companies and entrepreneurs, incentives for agriculture and veterinary medicine, which are planned for allocation through programs for the use of funds, are also planned for linking work experience and subsidizing interest rates - Guarantee Fund. By planning funds for the procurement of commodity reserves in the total amount of KM 20 million, the Government intends to intervene through a set of measures in cases of need to stabilize potential price increases of basic food items, co-finance the spring wheat sowing, and purchase the autumn harvest in FBiH.

In the part of capital transfers, which are planned in the Federation of BiH Budget for 2022 in the total amount of KM 300 million, an increase of 32 percent compared to 2021, the largest increase relates to capital transfers to public enterprises. The most significant transfers are for the construction of highways and expressways amounting to KM 229.3 million (83 percent more than in 2021), for co-financing the construction of railway infrastructure amounting to KM 5 million, for improving air traffic of the Federation of BiH amounting to KM 6 million, and KM 19.7 million for JP Aerodrom Bihać.

Interest expenditures are planned in the amount of KM 105.0 million, which is KM 18.4 million less than the funds planned in 2021. At today's session, the Government also determined the Draft Law on the Execution of the FBiH Budget for 2022, which sets priorities, including servicing internal and external debt, pension payments, transfers for veteran disability benefits, other veteran benefits, as well as non-combatant disability benefits and compensation for victims of war.

The Federal Government also determined and sent to the parliamentary procedure the Draft Law on Amendments to the Law on Budgets in the Federation of BiH. As explained, the main reason for adopting the amendments to this law is the introduction, i.e., laying the foundation for program budgeting and its implementation at the level of the Federation of BiH and cantons, strengthening organizational frameworks, developing a detailed budget structure, defining the goals of individual programs, as well as ensuring the budget based on the results of government policies and the upper limit of expenditures as stated in the FBiH Framework Budget Document. Furthermore, multi-year capital investments and the transfer of unspent funds for multi-year capital investments are defined.

Existing state support is prescribed, i.e., the allocation of funds in the form of subsidies (grants) and other types of public expenditures and other types of assistance in accordance with the Law on the State Aid System in BiH and bylaws. In addition, the provisions of the Law on Budgets are now aligned with the provisions of other federal regulations, such as the Law on Internal Audit in the Public Sector, the Law on Financial Management and Control in the Public Sector, and the Law on the Treasury.

All three drafts determined today have been sent to the FBiH Parliament for adoption under urgent procedure.