Fateful Decision to Spell Progress or Continued Stagnation for BiH Economy and Entrepreneurs

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

September of 2017 could be the crucial month for many BiH entrepreneurs. It could be remembered as the worst or the best month of the year. Entrepreneurs are waiting for the parliamentary discussion on the amendments to the Law on VAT. The Indirect Taxation Authority prepared the amendments intended to align the Law with EU legislation, thus fulfilling one of the obligations on our path to accession. The changes include raising the threshold for entering the VAT system from 50,000 to 100,000. This would certainly be a welcome change to small business owners, who would not have to pay VAT.

But what about the request made by 30,000 business owners in BiH, who want the deadline for paying VAT to be extended to the last day of the month?!

What about their request to lower the penalty interest rates from 0,04% to 0,02%?!

Judging by public statements made by representatives of the Indirect Taxation Authority, these requests will not be met. Why? We still don’t know, because the last MP question, sent at the beginning of June of this year, remains unanswered. We’re still waiting to hear what experts have to say. VAT cannot be treated as a political issue, although some do so in their public statements. VAT is an economic issue. Anything concerning the economy must be treated as strictly economic issue. The Parliamentary Assembly of BiH will make the final decision, but that decision should be based on analyses, projections and proposals put forward by experts in government institutions.

In September, the Governing Committee with have a chance to consider suggestions made by BiH business owners, while considering the proposed amendments. Needless to say, the business owners are fairly optimistic. Earlier this year, their proposal to introduce the VAT cash accounting scheme for businesses with turnovers under 1 million BAM was rejected. Their subsequent proposals were more modest. They asked the state to wait for their VAT at least until the end of the month. They wanted just a little bit more time, to make it easier for them. If modesty is a virtue, will their more modest requests be met with understanding? Are business owners worth a little help so they can survive and thrive? The answer should be yes. We mustn’t forget that the budget depends on the goods and services they produce. That every year brings a new record total VAT payment. I help you and you help me, is what they say. So when will the state help the economy?

In European countries the deadline for paying VAT is longer than in BiH: 12th day of the month for the previous month in Sweden and Finland, 14th in Bulgaria, 15th in Austria, Montenegro, Luxembourg and Serbia, 16th in Italy, 20th in Belgium, Estonia, Croatia, Latvia and Spain, 24th in France, 25th in the Czech Republic, Lithuania, Poland, Romania and Slovakia, 28th in Denmark, and last day of the month in Greece and Slovenia. The tax period for calculating and paying VAT is longer than one month in some countries, which makes it easier for business owners. For instance: 10th day of the months for the previous quarter in Germany, 20th in Hungary, 23rd in Ireland for the previous two months, last day of the month after the end of the quarter in the UK and the Netherlands, 40th day after the end of the quarter in Cyprus, 45th day after the end of the quarter in Malta, etc.

September brought us fall. But it may yet bring us something more. 

 

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