In this year’s last edition of the political minutes of the Morning Program of Federal TV, Faruk Hadžić, an economic analyst, was a guest.
Will the citizens of Bosnia and Herzegovina welcome an even more expensive New Year with the most expensive meal? How much and how will the increase in the price of electricity for businesses affect citizens? What will a minimum wage of one thousand BAM mean to workers? Is there an anti-inflation policy in Bosnia and Herzegovina?
-Minimum wage-
“The minimum wage in the Republika Srpska includes other non-taxable benefits that the minimum wage in the Federation, due to the non-implementation of fiscal laws, still does not include. So from 750 BAM, I’m talking right now, you have a hot meal and other non-taxable benefits, which is not the case in the Federation. Thus, if those tax-free allowances were also included in the Federation, perhaps the salary, or minimum income, would be higher in the Federation as well. The problem with this whole story about salaries is that no clear analyzes have been made of what is feasible at the moment, that’s why we have exactly such conflicting statements from both sides. We do not have a clear analysis of what the minimum wage will and should be. What is interesting for the Federation of Bosnia and Herzegovina, we saw that there were announcements that from January 1, the minimum wage will be 1000 BAM. My expectations are that if they do that, it can be in the range of 650 BAM, so up to 50 or so BAM to increase. Until the minimum wage law is passed, and it can only go with a set of fiscal laws, it cannot go alone,” he said.
-Set of fiscal laws-
“It is a set of laws that, if not passed, will have major consequences later. Expatriation of workers and the like. Because employers will no longer be able to give such a higher salary, without it being at the expense of rising prices. If the employer cannot cover your salary, he will have to raise the prices of the products to cover it. A set of fiscal laws must be passed and come into force in 2024. I appeal again to the Government of the Federation to put those sets of fiscal laws on the agenda as soon as possible. I appeal to put those laws into force and there will be no losses. It is always somehow put on the agenda, whether budgets will be threatened. Budgets will not be threatened, especially if those laws come into force on July 1. And that is one of the issues that can be improved because all the contributions that come down will go directly to the workers. If the fiscal laws are adopted in January of the first half of the year, they would enter into force on July 1. We would have a current fiscal framework by July 1, in which case the collection of contributions would continue because employers will have to raise wages. In that case, in the first half of the year, financial resources are collected more than in the previous year, and then in the second part, there will be a certain decrease. In the Law on Income Tax and the Law on Contributions, you have a minimum income. We first need to see what the Federation Government will offer under the Minimum Wage Law. If it is the minimum income, then it will be 1000 BAM guaranteed every month,” he said.
– Adoption of the budget-
”That’s not necessarily a bad thing. If, for example, an economic crisis is coming, there is some uncertainty, you can wait for the first 2-3 months and have temporary financing, see how the filling of the budget will move according to some parameters and then make a budget proposal. It is quite obvious that we cannot get the budget adopted by the end of the year. It remains to be seen whether the tax system reform will be included in the budget proposal. Therefore, nothing spectacular will happen if we go for temporary financing when it comes to the Federation of Bosnia and Herzegovina. When it comes to the level of Bosnia and Herzegovina, there is a political story, not an economic one, whether the budget should be increased or decreased. We may come to a situation where we will not have money to finance the elections. Because if you spend the whole year on temporary financing, then you don’t have an item for financing local elections. That issue will need to be resolved very quickly by spring,” he concluded.
-Decree on assistance to workers-
“It was actually offered on a voluntary basis to employers. In principle, it is, I won’t say compensation, that is, a simulation if we offer you the possibility of 420 BAM per month and if the worker is registered for the minimum wage and if the employer pays, then he has actually given him the minimum wage. Then that worker may or may not have 1000 BAM. It is now up to the good will of the employer. Any help is welcome, but we need real solutions, sets of fiscal laws. It is now crucial, we do not have a better and more important measure than a set of fiscal laws. In this way, the purchasing power of citizens would increase, which will compensate for the increase in these prices. I should also emphasize that we should not expect a dramatic drop in prices. The end of inflation is when prices stop rising. Now we need to let wages rise.
