House of Peoples of Bosnia's parl adopts critical excise tax bill

The bill has now been sent to the House of Representatives of the state-level Parliamentary Assembly for approval.

On November 24, Bosnia's government said it has adopted and sent to parliament a modified bill on changes to the excise tax law. The draft legislation was agreed to by entity level finance ministries and their respective prime ministers, as well as by members of the state-level government, following a series of consultations and with the active support of the EU delegation in Sarajevo.

Under the bill, excise taxes will not increase, except on biofuels and bioliquids; instead, motorway toll tax will rise by 0.15 marka ($0.09/0.08 euro). This will secure the necessary funds for the construction of motorways and the construction and reconstruction of all other types of roads, the government noted at the time.

A week earlier, the International Monetary Fund (IMF) said it is not releasing funds to Bosnia and Herzegovina until the country's parliament adopts a new law on excise taxes.

In September last year, the IMF approved a three-year 553.3 million euro loan ($648.2 million) to Bosnia to support the country's economic reform agenda. However, the IMF delayed the release of the second loan tranche in May, after the Bosnian authorities failed to meet the agreed reform targets.

Bosnia and Herzegovina is made up of two entities, the Federation and the Serb Republic. The country is hoping to restart the funding and investment cycle once the changes to the excise tax law are adopted.