FBiH Government is stifling tradesmen

The increase in contributions that tradesmen pay in the Federation of BiH, by more than 20 KM in the new year, is still the main topic that worries this group, which is already in a precarious situation due to the pandemic. However, this requires political will, and there is none.

Analysts agree that higher burdens in a situation where tradesmen do not know how to survive lead to further ruin, but the authorities apparently do not care. That is why the Minister of Economy of KS Adnan Delić announced that the KS Government will launch an initiative to the Government and Parliament of the Federation of BiH to react urgently through amendments to bad regulations and stop further injustice towards small entrepreneurs.

"Bad decisions by the authorities are coming due to the hardest period for economic entities. Tradesmen need help now, and under no circumstances should they be burdened further. While municipal mayors and the KS Government are finding possible solutions for tradesmen and planning the largest budget to date to support small businesses, higher levels are preemptively nullifying any relief with their taxes. This stepmotherly attitude towards the real sector must stop, as irreparable damage is being done in the long term," Delić believes.

Economic experts also believe that the legal regulations should be changed, regardless of the difficult situation caused by the pandemic. Analyst Faruk Hadžić previously told Klix.ba that the existing provisions of the law, where the basis for calculating contributions is linked to the average gross salary, are completely illogical and economically unjustified. In his opinion, the FBiH Government should have amended these provisions and linked them to the minimum wage, which would have fixed and significantly reduced contributions for tradesmen.

However, there has been no support for this so far. Naša stranka says they have tried to change the legal regulations through the FBiH Parliament, but their amendment to the Law on Contributions, which provides for a different calculation for tradesmen, was rejected.

"The reason for this increase is actually the negligence of the FBiH Government. Our amendment was rejected, which means it was consciously decided to continue with the practice where the average salary, inflated by state administration, dictates the price, and those who are financially endangered, in this case tradesmen, pay the price," the party states.

They point out that the reason for the increase in the average salary is particularly absurd.

"Namely, it increased because the number of employees in the first and second quarters in FBiH decreased due to the pandemic, specifically those in the real sector. Most often, these are people registered with the lowest salaries or salaries lower than the average. At the same time, the number of employees in the public sector remained the same or close to it, and the salary amount was stable. With such a contribution policy, the average salary could increase further because an increasing number of those with low salaries will exit the payroll system," they state.

They consider this irresponsible and incompetent crisis management, and the solution, when it comes to tradesmen, is very simple.

"The amendment to the Law on Contributions needs to be initiated again. It is possible to go in two directions. One is to link tradesmen's contributions to the minimum wage, which is also a long-term subsidy for tradesmen, and the second option would be more progressive and would involve calculating contributions based on the tradesmen's achieved income," Naša stranka announced.

Given that economists predict that this year will be particularly difficult for tradesmen, it is clear that new bases for calculating contributions for 2021 need to be determined as soon as possible. However, unfortunately, what is most important is missing - political will. In the meantime, tradesmen will pay 89.23 KM more this year than in 2016 on a monthly basis.