Will the IMF terminate the Arrangement with BiH due to failure to adopt the Law on Excise Duties?

imfThe majority of economic analysts believe that there will be no termination of the arrangement of the International Monetary Fund (IMF) with BiH, despite the failure of the Parliamentary Assembly of BiH to adopt the set of laws on excise duties.

House of Representatives of the Parliamentary Assembly of BiH refused to adopt the set of laws that provides an increase in excise duties on oil in BiH four times. At the last session, the majority of MPs accepted the negative report of the Commission for Finance and Budget, with which the proposals of the Council of Ministers of BiH were definitively withdrawn from parliamentary procedure.

This is a legal solution that represents one of conditions for obtaining the second tranche of funds from the IMF loan, which is why it is often assumed that this financial institution might stop “cooperation” with our country.

“I believe that everyone in the academic community agrees that the arrangement with the IMF will not be compromised. Similar experiences of states of Eastern Europe, especially Greece, showed that the IMF does not give up so easily on countries with which they have signed the agreement as it has been represented to us in all these years,” said economic analyst Admir Cavalic.

“The IMF is following a liberal economic policy and always gives recommendations to governments on what to do, but on the other hand, the government must learn to negotiate at some point. This means that they need to tell when something will not work, or that they can do something in a different way. This, unfortunately, is not likely to happen among our political leaders,” said Cavalic.

“What we can already see, and what governments will have to do, is to try to move towards higher internal borrowing by issuing treasury bills and other securities,” stated Cavalic.

According to him, the reaction of representatives of the Parliamentary Assembly of BiH, who refused to adopt a set of laws on increase of the excise taxes, as well as the resistance of citizens, is completely normal.

“In this way is formed a large opposition regarding this law. This is completely justified because the previous funds that were achieved through road taxes, excise taxes etc, were not invested in the right way,” said Cavalic.

(Source: Er. M./




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