FBiH Government Seeks Increase in Contributions, Employers Further Burdened

The Federal Government has established the Proposal for the Law on Amendments to the Law on Contributions and forwarded it to the parliamentary procedure for adoption under urgent procedure, reports the Bosnian news agency Patria.

These amendments will result in an increased contribution of about 30 KM for each employee, which will lead to an increase in fund revenues from contributions in the amount of about seven million KM per year. It is estimated that these amendments will affect about 20,000 employees.

The main reason for these amendments is to create a legal basis for stimulating production in low-accumulation activities through wage relief for employees in the textile, leather and footwear production, coal mines, as well as in traditional guild crafts, so that these activities with low employee wage costs can be sustainable and competitive on the market.

Namely, the provisions of the current law prescribed relief for a reduced base for calculating contributions, which could only be used if the lowest wages (350 KM) were paid, so they were practically difficult to use given the extremely low prescribed wage threshold.

Now it is prescribed that the preferential base for calculating contributions be slightly higher, and that, instead of 25 percent of the average wage, it amounts to 30 percent with a paid net wage that does not exceed 60 percent of the average monthly net wage in the Federation.

This law also introduces as contribution payers individual traders who work at open markets and closed stalls, where a preferential base for calculating contributions is also prescribed at the same level of relief as in low-accumulation branches, which will enable a transition from the informal to the formal economy.

This group with relief also includes taxi drivers because they have been classified by a special regulation as low-accumulation activities and as taxpayers have the same treatment as independent activities of traditional guild crafts.