The Federal Ministry of Development, Entrepreneurship and Crafts will be allocating around 5 million BAM this year to aid and support the economy.


In the press conference of the Federal Ministry of Development, Entrepreneurship and Crafts and the Institute for Youth Development KULT, held on May 19, 2016 at Networks, the forms of applying, criteria of selecting the users and areas for which the funds will be allocated were presented.


The Public Call for selecting the grantees of current transfers of the Federal Ministry of Development, Entrepreneurship and Crafts that the Ministry issues regularly at an annual level was published at the website of the Ministry and the funds will be allocated for the following:


-       - Incentives for women’s entrepreneurship,


-       - Incentives for youth entrepreneurship,


-      - Incentives for individual innovators,


-       - Improvement of institutional entrepreneurial infrastructure,


-       - Incentives for projects funded by the EU and other foreign donors,


-       - Incentives for associations, chambers and educational institutions,


-       - Technical coordination (introducing ISO and HACCP standards and ensuring the CE marking


       - Incentives for traditional and old crafts,


-       - Incentives for newly-founded SME subjects,


-       - Strengthening the competitiveness of technologically modern SME subjects.


As emphasized by the Minister of Development, Entrepreneurship and Crafts Amir Zuki?, it is very significant that funds of this Call will also be allocated to future high school students who are planning to educate themselves in deficient occupations. 


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There is a vast number of youth who have the ambition to start their own business, but many of them do not have the necessary funds. That is why this Public Call is a great encouragement to youth who want to accomplish something in this country – stated Jasmin Beši?, the Executive Director of the Institute for Youth Development KULT.


The Institute for Youth Development KULT will provide the Ministry with technical, advisory and coordination support in the process of informing youth, women and persons with newly-founded businesses primarily about the manners of applying for the Call.


As stated by Ajka Baru?i?, the Manager of the BH Business Site initiative realized by the Institute, small and medium-sized enterprises are the key generators of workplaces and everyone should be aware of this, especially if we consider the fact that there are around 500,000 unemployed in BiH and that youth are leaving the country in increasing numbers. This is why youth that are starting businesses represent the key of development.


The application deadline of the Public Call is June 17, 2016, and the Public Call is available at: www.fmrpo.gov.ba


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The topic of this year's 4th Forum on Domestic Production held in Banja Luka was “Quality – Recipe for Success”. The panel discussion held during the Forum was attended by representatives of the economic sector, of governmental and non-governmental organizations, representatives of the Agency for Food Safety of BiH, of the Consumers' Club of Tuzla Canton and of domestic producers.


As concluded during the discussion, the basic precondition of a successful contribution to development and procurement of domestic products is quality. Continuous improvement of quality according to the EU standards would certainly increase the number of buyers in both domestic and the foreign market.


Great attention was dedicated to the improvement of quality of individual products but also the the importance of branding already existing quality products. The panelists also discussed legislation and EU standards without which we certainly could not cross the borders of Bosnia and Herzegovina.


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The Forum participants invited domestic producers to pay special attention to quality and invited the citizens to purchase domestic products since it is the only manner to improve the prosperity of Bosnia and Herzegovina.


After the panel discussion, a visit to Vitaminka Company and Apeiron University was organized.


The 4th Forum on Domestic Production is followed by the biggest Campaign of Youth in BiH through which young people use social networks to promote domestic production. The promotion continues through the “SELFIE Campaign” during which all citizens can send their selfies with a domestic product of their choice to the following e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it. or to the “Forum on Domestic Production” Facebook page.


The selfie campaign is in fact a contest in which the author of the photography with the most likes will be awarded with a valuable reward and a recognition and the title of the “Ambassador of Domestic Production”. The best and the most active organization will be awarded with a recognition at the final manifestation of the campaign that will be attended by all representatives of partner organizations.


The Forum was organized by the Student Business Club of the International Burch University in collaboration with the Chamber of Economy of Republika Srpska, the Chamber of Economy of the Federation of BiH, the Apeiron University and the “Buy and Use Domestic Products – Produced with Quality in BiH” Association.


One of the partners of the event is the Institute for Youth Development KULT that supports youth initiatives and especially those that contribute to improving economic development and creating new workplaces.


 

The 4th consecutive Forum on Domestic Production will be held in Banja Luka on May 13, 2016. The Forum on Domestic Production in BiH resulted from ideas and activism of students and for the purpose of gathering all important subjects of domestic economy in one place and using constructive dialogue to indicate to the current problems of domestic producers and their possible solutions. One of the aims is to raise awareness of students and the wider public on both the importance of domestic production and on purchasing domestic products.


The organizer of the Forum is the Student Business Club and it received support from the Chamber of Economy of Republika Srpska and the Federation of Bosnia and Herzegovina, the Aiperion University, the “Kupujmo i koristimo doma?e – kvalitetno proizvedeno u BiH” (“Buy and Use Domestic Products – Produced with Quality in BiH”) Association and the Institute for Youth Development KULT.


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The Business Club is the first club at the International Burch University founded by students of the Faculty of Economics and Social Researches. The Club was founded for the purpose of associating the knowledge acquired at the University and the real business world and also for the purpose of preparing the students for future business challenges.


The Forum on Domestic Production will be held at the Chamber of Economics of Republika Srpska at 9 am.


 

The Institute for Youth Development KULT intensively advocates for introducing changes in the Law on VAT. The action of signing the letter of support to changes in the Law on VAT of Bosnia and Herzegovina is ongoing and the letter of support has so far been signed by over 30,000 business owners gathered around chambers of economy and crafts and by associations that focus on aiding the economy.


The letter of support is primarily intended for business owners and among the signatories are representatives of the Chamber of Economy and Crafts of the Sarajevo Canton, the Chamber of Economy of Sarajevo, Banja Luka, Mostar, Tuzla Canton, Central Bosnian Canton, Una-Sana Canton and Posavina Canton. The initiative was also supported by representatives of the Chamber of Economy and Crafts of FBiH and RS, the Association of Employers of FBiH, “Kupujmo i koristimo doma?e” (“Buy and Use Domestic Products”) Association and the Association for Improving Economic Relations between Germany and BiH.


The changes of the Law on VAT are necessary according to the statements of Miro DĹľakula, the Director of Agency for Indirect Taxation of BiH, who discussed the problematics at the recently held “2016 Jahorina Economic Forum”. As he stated, the VAT in BIH is based on 6th EC Directive that was placed out of force, and the 112 Directive is key for the VAT tax in the EU, so our country will have to change the Law on VAT in accordance with the EU accession process. 


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The Institute for Youth Development KULT advocates for introducing changes in the Law on Value added Tax according to which the taxpayers would pay the VAT after collecting their receivables and not by the 10th of the month, as the current Law stipulates. The changes would also refer to resloving the issue of right to deduction of input VAT. 


According to current legal provisions, the employers are obliged to pay for their taxes despite not having collected their receivables. This makes many business subjects insolvent and often forces them to terminate their business.


The letter of support is available on the following web-portal: www.podrzi.poslovniprostorbh.org.


Advocating for the changes in the Law is conducted as a part of the "BH Business Site" initiative, managed by the Institute for Youth Development KULT and which is the part of Civil Society Sustainability Project in Bosnia and Herzegovina (CSSP), realized by the Centers of Civil initiatives (CCI) and the Center for Promoting the Civil Society (CPCD) and supported by the US Agency for International Development (USAID). 


 

The letter of support to changes to Law on VAT was also signed by representatives of the Chamber of Economy and the Chamber of Crafts of the Sarajevo Canton.


In order to intensify the process of changing the Law on VAT, in April, the Institute for Youth Development KULT started the initiative of signing a letter of support for the process of introducing changes in the Law on Value Added Tax in Bosnia and Herzegovina.


In only 5 days, the letter of support was signed by over 20,000 business owners gathered around chambers of economy and crafts and by associations that focus on aiding the economy. The initiative was also supported by representatives of the Association of Employers of FBiH that has around 25,000 members with over 100,000 employees.


The Institute for Youth Development KULT advocates for introducing changes in the Law on Value added Tax according to which the taxpayers would pay the VAT after collecting their receivables and not by the 10th of the month, as the current Law stipulates.


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Current legal provisions are creating a business environment in which small and medium businesses are often obliged to terminate their business, so that introducing changes is necessary.


In May, the Institute will continue gathering letters of support and advocating for changes in the Law on VAT with governmental representatives.


The letter of supportis available on the following link: www.podrzi.poslovniprostorbh.org.


Advocating for the changes in the Law is conducted as a part of the "BH Business Site" initiative, managed by the Institute for Youth Development KULT and which is the part of Civil Society Sustainability Project in Bosnia and Herzegovina (CSSP), realized by the Centers of Civil initiatives (CCI) and the Center for Promoting the Civil Society (CPCD) and supported by the US Agency for International Development (USAID). 


 

The action of signing a letter of support to introducing changes in the Law on Value Added Tax in Bosnia and Herzegovina is still ongoing.


In order to intensify the process of changing the Law on VAT, in April, the Institute for Youth Development KULT started the initiative of signing a letter of support for the process of introducing changes in the Law on VAT.


The letter of support was primarily intended for business owners and since the initiative started, it has been signed by over 20,000 business owners gathered around chambers of economy and crafts and by associations that focus on aiding the economy.The initiative was also supported by representatives of the Association of Employers of FBiH that has around 25,000 members with over 100,000 employees.


Among the signatories are representatives of the Chamber of Economy and Crafts of the Sarajevo Canton, the Chamber of Economy of Banja Luka, Chamber of Economy of Tuzla Canton, Chamber of Economy of Una-Sana Canton and numerous business owners who decided to individually support this initiative.


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The Institute for Youth Development KULT advocates for introducing changes in the Law on Value added Tax according to which the taxpayers would pay the VAT after collecting their receivables and not by the 10th of the month, as the current Law stipulates.


According to current legal provisions, the employers are obliged to pay for their taxes despite not having collected their receivables. This makes many business subjects insolvent and often forces them to terminate their business.


The Institute will continue gathering letters of support and advocating for changes in the Law on VAT with governmental representatives.


The letter of support is available on the following web-portal: www.podrzi.poslovniprostorbh.org.


Advocating for the changes in the Law is conducted as a part of the "BH Business Site" initiative, managed by the Institute for Youth Development KULT and which is the part of Civil Society Sustainability Project in Bosnia and Herzegovina (CSSP), realized by the Centers of Civil initiatives (CCI) and the Center for Promoting the Civil Society (CPCD) and supported by the US Agency for International Development (USAID). 


 

WRITTEN BY: Ajka Baru?i?, M.Sc. Institute for Youth Development KULT


Ajka Fotografija copy copy copyThe Law on VAT in BiH stipulates that business owners are required to pay VAT between the 1st and 10th day of the month for the previous month, whether or not their customers had paid for their products and services. Therefore, business owners must first pay the state 17% of the sold goods' or service's selling price although they have not yet received payment for the goods or services from the customers. In many cases, the collection period for receivables is uncertain and long, sometimes taking up to several months or years, or in some cases the receivables remain uncollected. In addition to that, business owners must find a way to pay salaries and the corresponding contributions for their employees, and pay for operational and other business expenses. In the midst of all that, hardly anything is left for investing in growth, development, new jobs, innovation and other demands made by modern business trends. Business owners very frequently take out bank loans to cover all their expenses, which exacerbates the problem through high interest rates and difficulties in keeping pace with the loan payments dynamic. Such problems mostly plague small business owners. A business owner in Bosnia and Herzegovina who launched his/her own business, securing employment for him/herself, employed other people, pays taxes that are then injected into the state budget to cover the state administration expenses, is struggling to stay afloat. Ample negative statistical data testifies to the unfavorable nature of the business ambient of the domestic economy. This discouraging business environment in which businesses are struggling to survive is undoubtedly perpetuated by the VAT invoice accounting scheme.


Some European countries are bolstering the liquidity of small and medium-sized enterprises by introducing the VAT cash accounting scheme. This means that business owners pay VAT to the state only after having collected their receivables from customers who received their goods or services. This system, however, regulates the flip side of this issue as well. Namely, business owners can deduct entry tax for the goods and services bought and received from their supplier only after having paid their suppliers. Some EU member states have been using this system for years; it has been in use the longest in the United Kingdom and Ireland - since 1995. The countries using this scheme set a threshold for tax payers based on annual turnover, which in some cases amounts to as much as 2 million Euros (e.g. Spain, Ireland, Italy), 1.6 million Euros (e.g. United Kingdom), or, most frequently, half a million Euros, such as in Bulgaria, Portugal and Romania. The threshold can be lower, such as in Austria (110,000 Euros), Slovakia (100,000 Euros) and Slovenia (400,000 Euros). Some countries from the region have recently introduced this VAT cash accounting scheme for small businesses; tax payers in Serbia and Croatia with annual turnovers of up to 400,000 Euros have been eligible for this scheme since 2013 and 2015 respectively. Additional conditions can be introduced as well. In most cases, countries specified that this scheme cannot be used for importing and exporting goods and services, and that tax payers must have paid all their liabilities for public debt or only for VAT from the period preceding their entry into the system, and that the business owner must not have any recorded VAT offences, etc. The VAT cash accounting scheme is optional, i.e. eligible business owners can decide whether or not they wish to use it. The use period and leaving the system (under certain conditions, depending on the country) is between 6 months and 4 years. However, all countries stipulate that upon leaving the system, the businesses must pay all their liabilities within a certain time frame, unless it is necessary to follow regulations regarding liquidation or bankruptcy.


The topic of the initiative to amend the Law on VAT by introducing the VAT cash accounting scheme has been raised over the past several years by chambers of commerce, chambers of crafts, employers' associations and business owners. This year, the Institute for Youth Development KULT took more concrete steps, with the support of the informal Network for creating a better business environment in BiH, by inviting business owners, chambers of commerce and crafts and employers' association to support this initiative by signing a letter of support, with the intention of entering the proposal for amending the Law into the parliamentary process. Business owners say that this VAT scheme would greatly facilitate their current operations, improve their liquidity, and, in the long-term, create the conditions for generating new jobs and investing in development. The question is whether the authorities are willing to tackle this sensitive issue, considering the fact that the majority of the budget funds comes from indirect taxes, which include VAT. Since the Law on VAT was adopted in 2006, i.e. a new tax system was introduced to replace the previous sales tax system, it is reasonable to expect that after 10 years of implementing this Law innovations should be considered in order to help the economy and improve the long-term collection of VAT, both of which the aforementioned change could achieve. 


 

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