Government in the preliminary draft of the new law on income tax provides that the monthly base of a salary that amounts to 800 BAM is taxed at 13 %, while the amount of salary above 800 BAM will be taxed at 20 %, as reported by Dnevni Avaz.
This means that, for example, the salary of 1.000 BAM will be taxed at two rates. The amount of 800 BAM will be taxed at a rate of 13 %, and the remaining 200 BAM will be taxed at 20 %.
This means that tax that must be paid to this salary amounts to a total of 170 BAM or 130 BAM for 800 BAM, plus an additional 40 BAM for remaining 200 BAM.
Thus, the salary of 1,000 BAM will be burdened with the extra 70 BAM, considering that it was currently taxed by 10 % or 100 BAM, wrote Avaz.
(BiznisInfo came to somewhat different calculations, given that 13 % of 800 BAM is 104 BAM, plus 40 BAM for the remaining 200 BAM. This means that allocations would be increased by 44 BAM, and not for 70 BAM. Moreover, we need to consider the non-taxable part of the salary, which is currently 300 BAM).
However, this is a considerably higher burden of the middle class of the population.
The single tax rate is now 10 %.
When it comes to the taxation of contributions, the draft legislation says that the contribution rate for pension and disability insurance for the taxpayer will amount to 18.5 %.
As such, it is 1.5 % higher than now.
And the rate for health insurance increases, from the current 12.5 to 13.5 %.
On the other hand, the rate of contributions for unemployment insurance is reduced from 1.5 to 1 %.