Council of Ministers of Bosnia and Herzegovina Holds Its 161st Session

MORATORIUM TO FUTHER CIGARETTES PRICE RISE 

The Council of Ministers of BIH defined a proposal Law on Amendments and Supplements to the Law on Excises in Bosnia and Herzegovina, for the aim of stabilisation of revenues and tobacco products market. Under the Supplements to the Law the specific price of cigarettes in 2019, 2020, and 2021 is set to be KM 75.00 per 1,000 pieces, i.e. KM 1, 50 for 20 cigarettes packing, by which a moratorium was introduced to further cigarettes price increase.

Following revenue curve projections in the current 2018 year, and increase of revenue is expected for KM 37.3 million, and in 2019 KM 39.4 million, while in 2020 KM 41.6 million.

The Indirect Taxation Administration Steering Board should analyse by March 31, 2019, the effects of moratorium to a specific cigarettes excise increase.

The reasons for tabling the proposed law are of the fiscal and economic character in the sense of stabilisation of revenue collection form excises to tobacco processed products, stabilisation of cigarettes market in BUIH and prevention of further undermining of the BIH economic space.

Previous amendments of the Law on excises in domain of taxation of tobacco processed products aimed the harmonisation of excises policy with EU standards and securing the additional revenues to balance losses from customs in the period of five-year application of the SAA trade part and losses incurred due to global economic crisis. The continued growth of excise burden brought about the explosion of uncollected excise revenues and fast growth of retail sale process, which expectedly dissimulated regular trade with cigarettes and boosted black market, with the number of smokers remaining unchanged.

The Indirect Taxation Administration Steering Board of BIH will provide the Proposal Law to the BIH Parliamentarian Assembly for consideration under a shortened procedure.

 

DECISION ON TEMPORARY FINANCING OF BIH INSTITUTIONS

The Council of Ministers of BIH took a Decision on Temporary Financing of Institutions of Bosnia and Herzegovina and International Obligations of BIH for January-March 2019 in amount of KM 237,500,000, under proposal of the Ministry of Finance and Treasury. This is the fourth of funds approved for financing of BIH Institutions, in accordance with the Law on Budget of BH Institutions and International Obligations of BIH for 2018.

The financing of multi-year projects adopted under previous annual budget, as well as special purpose programmes will be continued from the funds transferred under the Law on Financing of BIH Institutions, i.e. secured through special purpose grants.

 

Q 1-3 BUDGET EXECUTION REPORT ADOPTED

The Council of Ministers of BIH adopted a Budget Execution report of Institutions of Bosnia and Herzegovina and International Obligations of BIH for Q 1-3 2018. The total revenues in the reported period of time were KM 751,679,110, while expenditures were KM 667,440,770.

In 2018 continued were earlier initiated austerity measures on salaries and material expenses, in order to secure the country’s macro-economic stability.

The foreign debt was regularly serviced, and total related realised expenditures and costs in Q1-3 2018 were KM 625,955,341.

 

BIH WITH MID-TERM SUSTAINABLE PUBLIC DEBT

The Council of Ministers of BIH took note of an Analysis of Bosnia and Herzegovina’s Public Debt Sustainability for 2018-2022, drafted by the Ministry of Finance and Treasury.

The purpose of the Analysis is to estimate the current state of the public indebtedness of IH and assess public indebtedness mid-term trends, as well as to define major risks to affect the public debt sustainability. According to the Analysis, the BIH credit rating will not fall in the mid-term, not there will be significant increases of referent interest rates and foreign currency exchange rates, and the BIH Central Bank will continue to keep the monetary stability, and no major delays in projects implementation, financed from foreign sources, will take place, according to the Ministry of Finance and Treasury.

The current estimate is that BIH has a mid-term sustainable public debt, based on the basic scenario for 2022, with real growth of 3.5%, 1.4 % inflation, 0.3% GDP primary balance, and effective interest rate of 2.5%. The public debt / GDP indicator in 2017 was 34.7%, and was not high, according to international standards.

 

SUPPORT TO BIH CULTURAL INSTITUTIONS PROJECTS

The Council of Ministers of BIH took a Decision on allocation of funds from the current grant “Co-Financing of projects of BIH Cultural Institutions” for 2018, under which 123 projects by cultural institutions in BIH got KM 3,097,000.

 

FOR CO-FINANCING OF NGO PROJECTS ON PREVENTION OF HIV AND TBC KM 50,000

The Council of Ministers of BIH took a decision to allocate funds from the current grant “Co-Financing of NGOs’ projects in prevention of HIV and TBC in Bosnia and Herzegovina” for 2018, in total amount of KM 50,000. For three NGO projects in HIV prevention KM 40,000 was allocated, and for TBC prevention two projects Km 10,000 was allocated.

 

ERASMUS + PROGRAMME

The Council of Ministers of BIH adopted Information by the Ministry of Civil Affairs on participation of Bosnia and Herzegovina in the Erasmus + Programme in a part relating to education and youth.

Information relates to the most important activities concerning BIH participation in the Erasmus + Programme in education and youth. Since the signing of an Agreement between the EU and BIH on participation in the Erasmus + Programme, BIH had an opportunity to participate in key available activities, within tree calls of het European Commission (in 2015, 2016, and 2017). In all three calls BIH participated with eight projects for each call in the high education area.

For projects approved in 2017, high education institutions of Bosnia and Herzegovina should attract funds in amount of EUR 1,783,854.0. In the area of capacity building of youth in the Western Balkans, youth NGOs got KM 913,277.95 through eight projects, which is an increase of more than KM 200,000 relative to the year before.

The Council of Ministers tasked BIH institutions to plan budget funds  for continuation of BIH participation in the Erasmus + Programme and secure human and other resources required for activities and obligations for a full implementation of the Programme. The Erasmus + office in Bosnia and Herzegovina was urged to take additional efforts to provide support to potential applicants  and intensify activities on promotion of the Erasmus + Programme in Bosnia and Herzegovina in the high education, in order to use funds and possibilities of the Erasmus +Programme as effective as possible.

 

AMENDED INSTRUCTIONS FOR DRAFTING ANNUAL WORK PROGRAMME ANAD ACTIVITY REPORT

The Council of Ministers of BIH took an Instruction amending the Instruction for drafting of Annual Work Programme and Activity Report of the Institutions of Bosnia and Hercegovina. Now on the BIH Institutions will draft their work programmes and activity reports fully in compliance with the adopted amendments and supplements to the Single rules for drafting legal regulations in the Institutions of BIH, which set forth harmonisation with the EU acquis, previous assessment of regulations effects and a comprehensive assessment of the regulations effects.

 

NATO INTEGRATION PROCESS COMMITTEE CHANGE ITS COMPOSITION

The Council of Ministers of BIH took a decision to amend the Decision on Committee for NATO integration process in BIH, in order to change the Committee composition due to retirement or transfer of some of its members.

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