Indirect tax revenues of 3.855 billion collected in six months

(Patria) - Indirect tax revenues in the first six months of 2021 amounted to 3.855 billion KM, an increase of 413 million KM or 12% compared to the same period in 2020, when they amounted to 3.442 billion KM. Indirect tax revenues are also higher compared to the same period of the record year 2019, when a total of 3.810 billion KM was collected.

In addition to distributed revenues, based on the special toll for highway construction and the construction and reconstruction of other roads (0.25 KM), the Federation of BiH received an additional 96.6 million KM, Republika Srpska 63.8 million KM, and Brčko District 3.3 million KM. The difference represents a reserve in a special toll account of 0.25 KM.

Indirect tax revenues in BiH are divided according to final consumption, not according to VAT payment locations. Why?

Let's take the example of telecom operators in BiH who, for example, have headquarters in Sarajevo, Mostar, and Banja Luka. These companies submit one VAT return and make one VAT payment, and if the data were extracted based on VAT payments, it would appear that these three companies paid VAT only in those three cities, which is not true, because it includes VAT paid by citizens throughout BiH on their phone bills. The same applies to the turnover of any other services and goods.

A company may have its headquarters in the capital of BiH and have branches throughout BiH, and that company will submit one VAT return and pay VAT in Sarajevo. However, that VAT amount includes the tax paid by citizens of BiH at all other sales points of that company throughout BiH. For this reason, data on the locations where the VAT return was submitted and where the VAT amount was paid are not data that provide accurate and precise information. Therefore, the coefficients for distributing indirect tax revenues are calculated according to final consumption, and according to the latest coefficients, revenues are distributed in such a way that the Federation receives 61.85%, Republika Srpska 34.60%, and Brčko District 3.55%. This means that citizens from each part of BiH paid that much VAT by purchasing goods and services in that specific period. That is why indirect tax revenues are divided according to these coefficients.