Federal income tax and dues bills sparked heated debate – Sarajevo Times


The bills on income tax and membership fees in the Federation have sparked heated debate – both among economic experts and citizens. The key controversy is to know if do these laws really bring higher wages, as the author claims, or is it another blow to the pockets of citizens?

All parties participating in the Government of the Federation of Bosnia and Herzegovina (FBiH) supported the proposed amendment to the law on income tax and contributions. If these proposals were supported in Parliament, the tax rate would drop from 10 to 13 percent, but the non-taxable portion of the curre’s salarynt 300 will equal 800 BAM.

“276,000 people will pay no income tax at all. The next 44 percent that ise on a salary between 800 and 2.440 to 234,000 people will pay less than they currently pay. Ultimately – only 4 percent of people over 2,440 go pay more than they pay now ”, said The Prime Minister of the FBiH Fadil Novalic (SDA).

What would these statistics look like, let’s go say, on the example of a net sal1000 BAM area? Now 700 BAM are taxed on this amount. And the spirith 10 percent – which is 70 BAM. In the new proposal, it will be taxable at 200 BAM at a rate of 13 percent, which is around 26 BAM. So the difference should stayto the worker, which should allow employers to increase wages. However, this will be their decision. These proposals also divideof the profession. They think that the non-taxable part of this salary should have increased to 1,000 BAM, and the rate should have remained at 10%.

“Statistically speaking, there will likely be a pay rise as we expand tax coverage, we include a hot meal, a year-end bonus support, employer assistance, transport, and similar. The question is whether this will happen in practice, how employers will react, ” has explainedprofessSor and Economic Analyst Admir Cavalic.

Ecoeconomic expert Anto Domazet noted this it was concluded that salary calculation should be relieved: “Wages are burdened with high expenses, they should be lightened in order to create space for wages to increase ad so that public needs are paid other sources – for example by taxing dividends.

According to the Proposal for the new law on contributions, the gross salary charge is reduced from 41.5 to 32.5.

“Now we tax a hot meal, we tax transport, a year-end bonus, and all elements which cannot be taxed, but the reduction is much bigger than the burdfr ”, declared Prime Minister Novalic.

The rate should be lowered, like almost all economic expertsthink, but they warn of another possible problem.

“The cumulative contribution rate should definitely be lowered – from 41.5 we come to 30%. What am I tooimportant is that we charge the service contract at the same time – this is not good because there are very few people workingg based on service contract, oneD there is an alternative – if the person has not been through the service contract, get a job, work on the basis of an employment contract, ”Cavalic said.

Employment contracts are alsoa subject of controversy. According to To the new law, contributions service contracts would be paid at the same premium rate as for full-time employeesuse. The promoter explained this with the fact that the goal is to provide health care to all employees. And that’s not the only subsubject of controversy. There is an inheritance tax aa gift. There was information that inheritance tax for real estate would also be paid, although he was the first parent. The prthe opponent declared that this area is governed by cantonal law and is not subject to these modifications. In addition to the many cotroversies, the question of the majority in Parliament of the FBiH is now open, which, of course, does not exist. It’s probably one of the reasons why these laws will not be presentd at the meeting of November 30, when they should have been.


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