FBIH ENTITY PARLIAMENT APPROVED A SET OF FISCAL LAWS

SARAJEVO, Bosnia (October 20,2007) – The FBIH Entity Parliament’s House of People supported a set of reform fiscal laws proposed by the FBIH Entity Government.

The delegates emphasized expectations that the future implementation of the laws will ensure a stabile system in the sectors they are related to.

The laws passed are Bill on Income Tax and Bill Changing and Amending the Law on Incomes in the FBIH Entity.

The FBIH Entity Government representatives emphasized that they want to eliminate the variety of laws in the sector as well as the fact that there are 50 different tax rates.

Law on Income Tax foresees introduction of two tax rates – 10 per cent rate for the salaries not exceeding 600 Bosnian Marks and 15 per cent rate for the salaries exceeding the sum.

Incomes that will not be submitted to taxation are the ones for which taxes have already been paid for: dividends, pensions, social aid and the like. The 5 per cent rate will be introduced for the dividends that are transferred abroad.

Bill on Income Tax foresees the decrease of the current 30 per cent tax rate to 10 per cent, as well as elimination of the exemptions. However, some new benefits will be introduced as well, and they concern the export companies and legal subjects who invest over 20 million Bosnian Marks in five years.

Bill Changing the Law on Incomes, which is the third law in the set, foresees decrease of the collective rate for the incomes from the current 32 to 31 per cent.

The pension and invalid insurance incomes will reach 17 per cent. Health insurance incomes will reach 15,5 and unemployment sector 1,5 per cent.