In anticipation of a new decision on the distribution of VAT, the Federation is losing millions of marks every month, economists warn. During that time, there is no announcement of a meeting where a new way of distributing income from indirect taxes would be defined. The meeting of the Management Board of the Indirect Taxation Administration of BiH has not been held since last year. The distribution of more than 800 million state money is also pending. Without that, it’s hard to budget.
Revenues from indirect taxes in the first five months of this year amounted to BAM 4 billion and 497 million. Compared to the same period last year, they are 407 million more. BAM 420 million has been allocated for the financing of state institutions. One billion and 960 million BAM was allocated to the Federation of Bosnia and Herzegovina, one billion and 97 million BAM to the Republika Srpska, and 109 million BAM to the Brčko District. Economists warn that this type of distribution is currently unfavorable for the Federation. There has been no meeting of the Governing Board of ITA BiH, where the new coefficients would have been discussed, since last year. During that time, the RS entity receives more money than it should.
“Since the RS needs money far more and urgently, right now and today, they will be more and more arrogant and will blackmail the Federation more and more about that distribution. It’s simply a vicious circle and it’s something that is really financially detrimental to the Federation,” says Željko Šain, a professor at the Faculty of Economics at UNSA.
The Rulebook on the calculation of transfer coefficients to entities was adopted back in 2008. The distribution is made on the basis of the calculated quarterly coefficients of temporary remittance, and on the basis of final consumption data for the three-month period. The profession warns that it is necessary to adopt new criteria for the redistribution of revenues generated on the basis of VAT. This would avoid political blockades and the possibility of blackmail because it would be known exactly to whom and how much it belongs to.
“It’s a series of criteria. Where the VAT is realized, the number of inhabitants and so on. A completely objectified approach can be made without much difficulty, which would automatically redistribute funds, rather than distributing funds according to the principle of sitting down at the negotiating table and whoever has a stronger negotiating position and more audacity taking a larger share of the pie,” says Aziz Šunje, professor at the Faculty of Economics, UNSA.
Šain adds that the distribution of such revenues must have an argumentative and dynamic character – and that there is no decision for all time: “Especially because our databases necessary for such a calculation require constant review – because the economy is dynamic. The bases for indirect taxes change over time. However, whoever is in a more favorable position – simply does not want it, especially if he is politically blackmailing”.
The last available determined coefficients are from July to September 2023. According to them, 62 percent belongs to the Federation, 34.44 percent to RS and 3.59 percent to Brčko. The last session of the Board of Directors, where the new coefficients were supposed to be discussed, was not held because Toni Kraljević, the federal minister of finance, did not respond to it. In addition, an expert has not yet been elected to the Management Board and should be proposed by the BiH Council of Ministers. Economic expert Svetlana Cenić emphasizes that there is still no decision on the settlement between the entities, nor the audit that was supposed to determine who was paid more and who received less money: “Milorad Dodik is burning. He needs to pay in June, RS needs to pay 380 million in credit obligations. So, he’s making more money, so it’s easiest this way, so sometimes a settlement will be made, but this avoids the law”.
Let us remind you that, apart from the coefficients, there is no agreement on the 800 million marks of state money, which the government is unable or unwilling to share. In this regard, there is no state budget either, which, as we heard in recent days, wants to be pushed through in a package with the unallocated 800 million. The desire of the State Minister of Finance and Treasury, Srđan Amidžić, at least for now, without the support of HDZ BiH and the Troika parties, Federalna writes.
