The Institute for Youth Development KULT has been advocating for amendments to the Law on VAT for the past several years. The initiative is a result of joint work of experts and business owners from all parts of BiH. It is our unanimous opinion that small entrepreneurs should pay VAT after collecting payment and not after issuing invoices and that the deadline for paying VAT should be extended until the end of the month. The proposed amendments to the Law do not bring any significant changes that could improve or boost the BiH economy.
Experts say that this model would be justified, implementable and the fairest solution for business owners. The initiative proposing this model, substantiated by experts and signed by over 30,000 business owners in BiH, was sent by the Institute to the Indirect Taxation Authority and its Governing Committee in June 2016. The model would allow small business owners to pay their VAT after collecting payment from their customers for the goods or services provided, and would allow input tax deduction only after they pay their suppliers for the goods and services received. Also included in the initiative is the proposal to move the deadline for paying VAT from the 10th to the last day of the month.
This proposed change is aligned with the relevant EU Directive and is already being implemented in EU member states.
When we sent the initiative to the Governing Committee of the Indirect Taxation Authority, and the Council of Ministers of BiH, we got negative responses. We are aware of the importance of this topic and the need to spotlight the initiative again so that decision makers pay attention to it. We, therefore, urge them to take into consideration the opinions of business owners when considering the proposed amendments to the Law. We believe that decision makers will show willingness and commitment to align the BiH laws with EU regulations, including the VAT Law, to support and help the liquidity, growth, and development of the BiH economy.
Youth are leaving BiH in droves, and one of the reasons is the lack of an incentivizing business climate. Although new research shows that youth are becoming increasingly interested in entrepreneurship, the business climate acts as a deterrent and is, however indirectly, telling them to put their potential to use in the European Union.
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