Established amendments to the Bill on income tax: No taxation up to 1,000 KM
At the proposal of the Federal Ministry of Finance, the FBiH Government established amendments to the Draft Law on Income Tax. The amendments established today become an integral part of the Draft Law that the Government previously referred to the parliamentary procedure under the regular procedure.
One of the amendments established that income up to 1,000 KM will not be taxed. This amendment to the proposal of the Government’s law in the Parliament changes the personal deduction on a monthly level from the proposed 800 KM to 1,000 KM as an item in the calculation of total income. Namely, the intention of the personal deduction for income from non-independent and independent work is to protect low wages, which is reflected in the calculation as a zero rate of income tax up to the proposed 1,000 KM. An increase in the personal deduction from KM 800 to KM 1,000 was proposed as a measure to help the working-age population.
According to the explanation of the second established amendment, it was also proposed that for exempted income in the name of scholarship, practice costs, and education and volunteering, the method of declaring exempted income should be changed from a fixed amount, as it was, to a percentage amount in relation to the average salary. The proposal for this change was driven by future unanticipated inflationary pressures, where these exempt amounts will rise as average wages rise.
In addition, the proposal is to increase the amount of exempted income in the name of severance pay upon retirement from three to six average salaries. The proposal for this change was also driven by future unforeseen inflationary pressures and income protection for future retirees.
The Law on Infertility Treatment with Biomedically Assisted Fertilization introduced that the costs of this treatment are recognized at the expense of the budget of the Federation of Bosnia and Herzegovina, and this type of income is incorporated into the categories of income exempt from taxation.
In addition, it was proposed to include the income from paid insured sums from life insurance and voluntary health insurance into the exempted income, as an incentive to the population to use the potential of the insurance sector, and relieve the burden of mandatory health insurance.
Also, the amendment established that the start of application of the law will be 1 January 2024. years.