Despite the adoption of the Law on VAT Refund for First Real Estate in April last year by both houses of the Parliamentary Assembly of Bosnia and Herzegovina, citizens are still unable to exercise this right because the Governing Board of the Indirect Taxation Authority (ITA) has failed to adopt the necessary Rulebook for implementation.
The delay has caused frustration among young people who were counting on VAT refunds to ease the financial burden of purchasing their first homes. Many planned to use the refund money for furnishing apartments and covering additional housing expenses.
“I would use it for basic equipment. Any help is welcome,” said Nikola Suša from Banja Luka. “It would definitely help young people, and it’s sad that it still hasn’t been realized. The most important thing is for young people to stay here.”
The Chairman of the ITA Governing Board and Minister of Finance of Bosnia and Herzegovina, Srđan Amidžić, blamed representatives from the Federation of Bosnia and Herzegovina for failing to attend the latest board session where the Rulebook was expected to be discussed.
“Every citizen could receive up to 25,000 KM in VAT refunds for their first property, but representatives from the Federation did not want that at this moment,” Amidžić stated.
However, Federation representatives defended their absence, saying the session had been scheduled on the eve of Eid and that requests to postpone the meeting had been ignored.
“Religious holidays should be respected, and the session should have been scheduled at a different time,” said Zijad Krnjić, a member of the ITA Governing Board.
Economic analysts warn that the delays are directly harming citizens. Economist Zoran Pavlović pointed out that rising prices have reduced the real value of any future refunds.
“Everything they would buy with that money has become more expensive. People who bought apartments last year are now at a loss because nobody did their job on time,” Pavlović said.
Behind the institutional paralysis lies a deeper political and financial dispute over the distribution of indirect tax revenues between the Federation of Bosnia and Herzegovina and Republika Srpska. The Federation claims it is owed around 170 million KM, while Republika Srpska insists the Federation owes it approximately 30 million KM plus interest.
The Court of Bosnia and Herzegovina has confirmed that a preliminary hearing in the lawsuit filed by the Federation against Republika Srpska and the ITA Governing Board is scheduled for July 1. The Federation alleges Republika Srpska improperly benefited by more than 73 million KM through the tax revenue distribution system during 2023 and 2024.
Republika Srpska Finance Minister Zora Vidović rejected those claims, arguing that court rulings from previous years support the RS position regarding outstanding payments.
Political representatives and civil society members increasingly criticize the deadlock, claiming ordinary citizens are paying the price for political disputes.
“We pay taxes regularly, yet citizens are being used as leverage in political conflicts,” said Aleksandar Trifunović, editor of the Buka portal.
Indirect tax revenues in Bosnia and Herzegovina- including VAT, excise duties, and customs revenues-are collected into a single account and distributed among the Federation of Bosnia and Herzegovina, Republika Srpska, and the Brčko District according to established coefficients. Currently, the Federation receives 62.01 percent, Republika Srpska 34.44 percent, and Brčko District 3.55 percent.
Until political disagreements are resolved and the Rulebook is adopted, thousands of citizens remain unable to claim the VAT refunds promised by law.
