Amendments to the Income Tax Bill Adopted: No Tax on Income up to 1,000 KM

(Patria) - At the proposal of the Federal Ministry of Finance, the FBiH Government has adopted amendments to the Bill on Income Tax. The amendments adopted today become an integral part of the Bill that the Government previously sent to the parliamentary procedure through the regular procedure.

One of the amendments stipulates that income up to 1,000 KM will not be taxed. This amendment to the Government's proposed law makes a change to the personal deduction on a monthly basis, from the proposed 800 KM to 1,000 KM as an item in the calculation of total income. Namely, the intention of the personal deduction for income from dependent and independent work is to protect low wages, which is reflected in the calculation as a zero income tax rate up to the proposed 1,000 KM. The increase in the personal deduction from 800 KM to 1,000 KM is proposed as a measure to help the working-age population.

According to the explanation of the second adopted amendment, it is also proposed that for exempt income in the form of scholarships, internship costs, as well as education and volunteering, the method of expressing exempt income be changed from a fixed amount, as it was, to a percentage of the average salary. The proposal for this change was prompted by future unforeseen inflationary pressures, where these exempt amounts will grow with the growth of the average salary.

In addition, the proposal is to increase the amount of exempt income for severance pay upon retirement from three to six average salaries. The proposal for this change was also prompted by future unforeseen inflationary pressures and the protection of future pensioners' incomes.

The Law on Infertility Treatment through Medically Assisted Reproduction introduced that the costs of this treatment are recognized at the expense of the budget of the Federation of BiH, and this type of income is incorporated into the categories of income exempt from taxation.

In addition, it is proposed that income from paid life insurance and voluntary health insurance sums be incorporated into exempt income, as an incentive for the population to utilize the potential of the insurance sector, and to relieve mandatory health insurance.

Also, the amendment stipulates that the law will come into effect on January 1, 2024.