IT IS NOT TRUE THAT THIS GOVERNMENT ONLY HELPS UNDERDEVELOPED MUNICIPALITIES

Regarding the Proposed Amendments to the Budget System Law of Republika Srpska and Redistribution of Revenue from Indirect Taxation (VAT)

The Mayor of Berkovići, Bojan Samardžić, has addressed the proposed amendments to the Budget System Law of Republika Srpska and the redistribution of revenues generated from indirect taxation (VAT). He emphasized that it is not true that this measure solely supports underdeveloped and significantly underdeveloped municipalities.

"It is not true that the government is helping underdeveloped municipalities with this measure."
"On the contrary, developed local communities such as Laktaši, Trebinje, and Gradiška also participate in the redistribution of funds. In fact, over 90% of local government units are included in the redistribution. According to the proposed changes, funds would be redistributed in such a way that municipalities and cities with more than 100,000 inhabitants (read Banja Luka and Bijeljina) would see a 7% reduction in revenue from indirect taxes. This amount would then be allocated to municipalities and cities with fewer than 50,000 inhabitants, with 65% of the funds going to local communities that generated less than 5 million BAM in revenue from indirect taxes in the previous year, and 35% to those with revenues exceeding this amount," stated Samardžić, who serves as the mayor of a small and underdeveloped municipality.

He further emphasized that the final redistribution is decided by the government, which highlights centralized power and political control rather than a fair and systemic approach to providing aid.

"Although the redistribution of VAT may offer short-term benefits, it does not solve the problems of underdeveloped municipalities. Fundamental solutions require long-term strategies and legal amendments to establish stable foundations for development. Among other things, it is necessary to:

  • Strengthen local self-governance to allow local communities the right to manage resources within their territories. This aligns with European practices and experiences and would ensure greater autonomy and financial stability.
  • Adopt a Law on Financing Local Government Units to establish a special fund for supporting underdeveloped municipalities, ensuring a stable source of funding for meeting the needs of these communities.
  • Adopt a Law on Balanced Development to provide a strategy for reducing disparities between developed and underdeveloped areas, with concrete mechanisms for achieving balanced development.
  • Provide fiscal incentives for investors by exempting those who choose to conduct business activities in underdeveloped municipalities from paying contributions for the first few years of operation, encouraging investment and the development of the local economy."

Samardžić believes that the proposed redistribution, while it may bring temporary benefits, is not a sustainable solution.

"True assistance for underdeveloped municipalities lies in systemic reforms that ensure long-term stability, not in politically motivated measures. As a mayor, I advocate for genuine changes that will enable the balanced development of all local communities," stated Samardžić.

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