The Government of the Federation of Bosnia and Herzegovina (FBiH) yesterday, at an emergency session, at the proposal of the Federal Ministry of Finance, established the Draft Law on Fiscalization of Transactions in the FBiH, which will be sent into further parliamentary procedure.
The law regulates the obligation to issue receipts, the electronic system for recording transactions, the system of supervision in the area of fiscalization of transactions, penal provisions, as well as other issues of importance for fiscalization on the territory of the FBiH.
The purpose of that law is to prevent tax evasion as a consequence of the informal economy by using technological systems that enable the secure collection and transfer of information in real time for each transaction on the territory of the FBiH.
As the proposer explained, the process of fiscalization of turnover, that is, transactions in the economy of the FBiH, is not a new concept, since the system of fiscalization was regulated by the Law on Fiscal Systems adopted in 2009, which began to be applied from 2010/2011.
However, bearing in mind that fiscalization in its essence implies the use of modern technological solutions and its integration into the daily operations of entities, the existing legal framework has proven insufficient for following the rapid development of information technologies and the comprehensive digitalization of business processes in the economy.
Primarily, the analysis of the current situation in the area of reporting on transactions through the fiscal system in the FBiH revealed a number of problems in the application of the valid legal and technical framework.
Considering the stated shortcomings of the existing fiscalization system, as well as the experiences of other countries that have implemented some of the models of fiscalization, and taking into account certain proposals, comments, and suggestions of all participants in the public debate, the introduction of fiscalization is proposed along the lines of a combination which, according to assessments, brings satisfactory benefits in relation to the accompanying costs.
The proposer states that the purpose of the new Law on Fiscalization of Transactions in the FBiH is the establishment of a comprehensive system of reporting by the Tax Administration on business transactions, the provision of free applications for small fiscalization taxpayers, the reduction of tax evasion through cross-checking of data in the Tax Administration, and harmonization with European directives and the modernization of the tax system, as well as increasing the efficiency of tax collection and suppressing the grey economy.
The proposer also states that this achieves two key goals. The first is the precise determination of the amount of VAT that is collected within the Federation, and the second is the exact determination of other tax obligations that arise from those transactions.
By establishing this system of supervision over transactions, a higher level of fiscal stability of public finances is ensured, because efficiency is increased in the collection of both indirect and direct taxes.
In this way, the space for tax evasion and the informal economy is reduced, which contributes to a more stable and fairer tax system.
The main instrument in the fight against tax evasion is the synergistic combination of three key elements: quality and clear legislation, access to information in real time, and the application of modern technological solutions. Each of these elements has an irreplaceable role in creating an efficient tax system.
The new Law proposes that every transaction must be documented either through receipts or invoices, and the Tax Administration should be informed about all transactions.
The proposer states that without quality legislation, even the most modern technology cannot achieve the desired effect.
The commitment of the Government of the FBiH to modernizing the fiscal system and suppressing the informal economy represents a strategic step toward strengthening fiscal stability and sustainable economic development.
The modernization of the tax system will have multiple positive effects.
The Law on Fiscalization of Transactions in the FBiH represents one of the key reform laws within the fiscal system of that entity.
Its harmonization with the new tax rules of the European Union (EU) arises from the fact that the concept and basic principles of the law were developed in accordance with the guidelines and priorities of fiscal policy of both the Federation and the EU, as stated by the Office for Public Relations of the Government of the FBiH.
