THOSE PROPOSING VAT REDUCTION ARE PROPOSING BUDGET INSTABILITY FOR ENTITIES

BANJA LUKA, MARCH 26 /SRNA/ - Those proposing a VAT reduction without any expertise or knowledge are actually suggesting budget instability for the entities and all their disbursements, while creating extra profits for retail chains or anyone affected by the reduction, said Srđan Amidžić, Minister of Finance and Treasury in the Council of Ministers.

Amidžić believes it would be better to focus on increasing workers’ salaries, because if the incomes of budget-funded employees grow, it would compensate for rising prices and ensure stability for all budget categories and users.

"This is a systemic measure and a proof of the current commitment of the Republika Srpska government to redirect all surplus funds to these budget categories," Amidžić said.

He emphasized that he wanted to clarify what kinds of decisions are being made, what solutions are possible, and what is just misleading the public.

"I have heard a competition of ideas about which taxes should be abolished to supposedly show care for citizens. There were many proposals, including VAT reduction, and now the current topic is excise taxes. This is a false concern for citizens. We must say who would bear the cost of a VAT reduction," Amidžić said at a press conference in Banja Luka.

He explained that VAT is a source of revenue for the entity's budgets, and we know which payments are being made from these budgets.

"Those proposing reduced revenues for the budgets of Republika Srpska and the Federation of BiH are the same ones trying to endanger all disbursements funded from these budgets," Amidžić emphasized.

He assessed that such proposals are not meant to ease citizens’ lives, but rather to create instability and a situation in which the payment of all budget-related obligations in Republika Srpska would be uncertain.

"I have the impression that these proposals are coordinated with all retail chains. When have we ever seen VAT reductions actually lead to lower prices in practice?" Amidžić asked, adding that in such a case, prices would not fall, or would do so insignificantly, while retail chains would gain extra profit.