BUSINESS

No IMF Loan without an Agreement on Excise Taxes

fuel2Although the excise taxes on tobacco and alcohol became effective yesterday, there are no excise taxes on petroleum because the authorities in BiH have not reached an agreement yet. Regardless of the fact that the Supplementary Letter of Intent by the International Monetary Fund (IMF) emphasized that excise taxes are a condition for the second tranche of the loan due to complaints on the way the income from excise taxes is distributed, everything is on hold.

After a series of increases in prices of fuel, a good news for drivers and oil traders is that prices have not increased on January 1 as it was announced, this time because of excise taxes and because the Law on Excise Taxes was not adopted by the House of Representatives of the Parliament of BiH, and later by the Steering Board of the Indirect Taxation Authority. Excise taxes on petroleum and petroleum products were supposed to increase by 15 fennings.

“Excise taxes must be paid by someone, and that are BiH citizens. Currently in the structure of the fuel prices we have personal excise tax, addition for motorways in the amount of 10 fennings and addition for maintenance of the existing roads in the amount of 15 fennings. With these new 15 fennings everything is still unclear,” said Milenko Bošković, President of the Association of Oil Traders in BiH.

Authorities in RS, FBiH and BiH promised several times to increase excise taxes and they also obliged to do so in the Supplementary Letter of Intent. They were supposed to increase excise taxes on fuel no later than January 2017. However, due to disagreement on the payments to the single account, there is no money from the IMF or any other loans. Construction of the Corridor 5C and the Port Brčko is also brought into question.

“I believe we will have enough time to adopt the Law on Excise Taxes until the funds become operational. After the signing, it must pass the ratification process, which takes time,” said the Director of Motorways of FBiH Adnan Terzić.

Without the adoption of the Law on Excise Taxes, important investments are postponed, such as the loan for the construction of the Corridor 5C in the amount of 156 million EUR and additional 56 million EUR for reconstruction of roads in FBiH. None of those investments will be feasible. Law on Excise Taxes is an initial request by the IMF for the second tranche of the loan in the amount of 80 million EUR.

(Source: novovrijeme.ba)

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