Employers: wage increases in Bosnia and Herzegovina are only possible with reduced taxes and contributions


Federal Prime Minister Fadil Novalic, thanks to economic growth, announced an increase in the minimum wage from 406 to 700 BAM. Before that, the urgent adoption of the proposal amending the law on contributions and the law on income tax is needed so that employers can guarantee wage growth. If the parliamentary procedure lasts, Bosnia and Herzegovina (BiH) is threatened by an even more massive exodus of the able-bodied population from our country.

At a time of rising staple food prices, these are some optimistic announcements from the federal government, at least for those who are now receiving minimums.

“Realizing that the minimum wage (406 BAM) is unacceptably low, we have based our work on establishing a positive economic trend, that is, achieving economic growth. The current economic growth of the Federation of BiH (FBiH) allows the government of the FBiH to increase the minimum wage to 700 BAM and thus achieve an increase of 72.4%. “

Employers warn that without lower taxes and workplace contributions, higher incomes cannot be expected. Otherwise, as they claim, such a decision would have the opposite effect.

“These 700 BAM announced by the government should be specified, whether it is a hot meal, the end-of-year bonus, transport, all income accruing to the worker. If this is really the case, the question is whether this is an increase in the minimum wage, as the minimum wage is 406 BAM, which with a hot meal and transportation reaches an approximate amount. If the contributions are not reduced, most companies will not be able to support this increase and this will lead to the dismissal of workers, ”said Suhad Eco, member of the board of directors of the FBiH Employers’ Association.

Amendments to the law on contributions and the law on income tax would lead to relieve the economy and increase not only the minimum wage but also other wages. That is why everything depends on parliamentarians.

“If there is no decrease in levies, it is impossible to realize it because there are so many levies on employers on various forms of tax and parafiscal allowances that they will not be able to increase wages. only if they increase the prices of their products and services. , and that will mean not only inflation that people will not even buy them anymore, ”explained Zeljko Sain, professor at the Faculty of Economics at Sarajevo University.

According to the previous general collective agreement, which ceased to be in effect, the lowest hourly wage in the lumber industry was 2.30 BAM. That is why, due to the lack of regulations, it has so far depended on employers. With the recent signing of the collective agreement between the Association of Employers and Trade Unions, it has increased by more than 25 percent, writes Federalna.

E.Dz.

About Eleanor Blackburn

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