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Economy after the Covid 19 epidemic

Review of the legal framework of virus consequences

During the previous period, the whole world, including the Republika Srpska, ie Bosnia and Herzegovina, was affected by the pandemic of the Covid-19 virus, ie the corona virus. The virus in question has led to the introduction of numerous restrictive measures, from the declaration of a state of accident at the FBiH level, through the state of emergency and ultimately the state of emergency in the Republika Srpska. Such measures were necessary both in a preventive and in a repressive sense, all in order to prevent the occurrence and mitigate the consequences caused by this virus. As there has been a reduction in economic flows at the global level, which de facto causes a decline in global gross domestic product and a recession, it is necessary for states and lower levels of government to take measures that will best help the economy and maintain economic activity in the new situation. Exceptional times require exceptional measures. In this regard, this article reviews some of the most important measures adopted at the entity and local levels of government, with the aim of preventing the negative consequences for all entities whose work is in a state of emergency and an accident caused by the Covid- 19 suspended or aggravated. All economic entities should be familiar with the opportunities available to them, and in this regard use them in order to overcome the crisis of restrictions on economic activities in the easiest possible way.
Republika Srpska, as one of the entities of Bosnia and Herzegovina on 16.3.2020. passed the Decision on declaring a state of emergency, and then the Decision on declaring a state of emergency, published in the “Official Gazette of the Republic of Srpska” no. 31/20 of 2.4.2020. year, which came into force the next day, or 3.4.2020. years. The appropriate executive power, primarily the Government, and then since the declaration of the state of emergency, the President of the Republika Srpska, has adopted a series of measures to provide direct and indirect assistance to mitigate the negative consequences for economic flows caused by the situation, namely:

  • Decision on temporary deferral of payment of tax liabilities and Decision on the manner of settlement of income tax and contributions for March 2020, which are by the Decree with legal force on tax measures to mitigate the economic consequences caused by Covid-19 disease caused by SARS-CoV-2 virus published in the “Official Gazette no. 35/20 of 10.4.2020. were repealed, but not in the way that the same Decisions were annulled, but in the way that the Decree regulated the reliefs in more detail because it enabled the extension of deadlines for submitting annual returns, deadlines for settling tax liabilities, postponing the abolition of decisions on deferred payment of taxes, and adopted a number of other measures with the aim of providing certain relief in overcoming the newly created situation that had a negative impact on the operations of economic entities. In the first place, the decision in question enabled taxpayers to file a tax return for income tax in 2019 and a tax return for income tax for 2019 by April 30, 2020. year, instead of until 31.3.2020. years. In this regard, all economic entities that have not fulfilled their statutory obligation to file income tax and income tax for 2019, can do the same by the end of the current month, ie the month of April. Also, in addition to the above, payers of contributions for pension and disability insurance and health insurance who perform agricultural activities, and are registered in the Register of Agricultural Holdings as holders of commercial family farms, have extended the deadline for reporting the annual contribution for 2019, which can apply to 30.4.2020. year, instead of the previously planned 31.3.2020. years. Furthermore, in addition to the obligations that are Regarding mandatory applications for 2019, reliefs are given in terms of payment of taxes and their application for the current year, 2020, so the payers of the utility tax for 2020, and the payers of the special republic tax – entrepreneurs whose deadline for registration and payment is of 50% of the same by law determined for the day 31.3.2020. year, I can apply until 30.4.2020. years. Furthermore, the Decree of the President of the Republika Srpska extended the deadlines for settling tax liabilities, so the deadline for payment of income tax and income tax for 2019 was extended to June 30, 2020. year, which also applies to the payment of fees for the improvement of public forest functions and fire compensation. In addition to the extension of the deadline for payment of the stated obligations, to all taxpayers who have difficulties in business due to which they fail by the specified date, ie by 30.6.2020. year to settle the above obligations is given the opportunity to submit to the Tax Administration of Republika Srpska a request for payment of these obligations in installments by the end of 2020. in which case they are required to submit an appropriate written statement of difficulties to be submitted no later than 30.6.2020. years. It is important to note that in the case of such a modality of payment of the stated obligations, interest on deferred payment will not be calculated and collected. Furthermore, those taxpayers who own real estate will duly receive a tax invoice that will be issued no later than 30.6.2020. year, but the deadlines for its payment have been extended in such a way that the first part of the real estate tax must be settled by 30.9.2020. year, and the second part of the calculated real estate tax until 30.12.2020. years. When adopting measures that facilitate overcoming the crisis and the situation, the amount of the prescribed minimum annual tax paid by taxpayers who have the status of a small entrepreneur, and which cannot be less than 240.00 KM, is noted, noting that the status of a small entrepreneur have individuals who are self-employed, not lawyers, notaries, engineers, architects, tax advisors, bankruptcy trustees, interpreters, translators, journalists, artists, athletes and others, and who do not employ more than three workers, do not earn an annual income of more than 50,000, 00 KM and do not generate income by jointly performing independent activity. Furthermore, special measures apply to those taxpayers who are prohibited and restricted from working or reduced business activity in conditions of emergency and state of emergency. Thus, all taxpayers, who have previously been approved deferred payment of tax debt, during the state of emergency and emergency will not be revoked the decision on deferred payment, and in the period of this state will not be charged interest, starting from the war due in March 2020, with the remark that taxpayers who have difficulties in doing business and use this right are obliged to submit to the Tax Administration of the Republic of Srpska an appropriate statement on difficulties in doing business. What is very important to point out is that all employers, legal entities and entrepreneurs, and persons who earn income from self-employment, and who by the decision of the Republic Headquarters for Emergency Situations, or city or municipal prohibited from performing activities and who paid salaries for the month of March 2020, at the expense of the Solidarity Fund, they will be provided with funds for the payment of taxes and contributions for the month in question, with the obligation for employers and self-employed persons to submit written documents to the Tax Administration. a statement with a request for remediation of the consequences caused by the corona virus by 11.5.2020 at the latest. year, for March 2020. Employees of legal entities and entrepreneurs, as well as holders of independent activities who perform this activity as a core, and who are prohibited by the decision of the Staff or who stopped working as a result of the pandemic will be paid the minimum wage before tax (520,00 KM) and the lowest salary will be calculated and paid contributions, for April 2020, which will be provided from the Solidarity Fund for the Reconstruction of the Republika Srpska, provided that persons who want and meet the conditions for exercising these rights must submit a request to the Tax administration of the Republika Srpska no later than June 10, 2020. for April 2020. Therefore, the measures in question have maximally facilitated the employer’s charges against the employee, ie the charges against the state for the employee. These measures are actually intended to achieve a significant relief for economic entities in terms of labor, which is one of the three key elements of the production process and survival of each economic entity, and to keep as many people employed, so that immediately after its completion labor for all economic entities whose work was prohibited or disabled due to the situation in question.
  • In addition to the already mentioned Decree, ie the Government Decision that preceded it, there are a number of other acts adopted by the Government and other bodies, which are essential measures to support economic entities and relief to overcome the situation, and one of them is the Decision on a three-month moratorium repayment of principal and interest for the obligations of legal entities and entrepreneurs to whom funds have been placed directly or indirectly through financial intermediaries or directly from funds managed by the Investment and Development Bank of the Republic of Srpska. Therefore, the RBI will enable all users of its funds, legal entities and entrepreneurs to submit a request for a three-month moratorium on repayment of principal and interest, with an extension of the repayment period for another three months. This Decision was published in “Official Gazette. gl. RS “no. 28/20 of 27.3.2020. year, and entered into force the next day, ie 28.3.2020. years.
  • The Banking Agency on March 20, 2020. passed a Decision on temporary measures for banks to mitigate the negative economic consequences caused by the viral disease Covid-19, which was published in “Sl. gl. RS “, no. 27/20 of 24.3.2020. year and which came into force the next day. The Decision envisages measures for natural and legal persons whose creditworthiness has deteriorated due to the negative impact of the Covid-19 viral disease pandemic, ie whose sources of repayment have been reduced as a result and he has been prevented from paying his credit obligations. This measure can be applied in relation to its clients, and thus, of course, to economic entities, by all banks based in the Republika Srpska, to which the Banking Agency of the Republika Srpska has issued a license to operate. The most important measure that can be applied is the so-called moratorium, which implies a deferral of payment of credit obligations for a certain period of time, in addition to the moratorium approved as a special measure, the bank is authorized to apply while the emergency situation lasts, ie the state of emergency and the state of natural disaster, and when the final decision on a possible special measure will be made in agreement with the client and in relation to the general liquidity of the entity after the abolition of these conditions. During the moratorium on repayment of credit obligations, it is important to point out that no interest is charged for a period of up to 6 months, nor is the agreed interest rate increased, nor is a fee charged for changing the credit regime. In addition to the moratorium, as a measure that can be approved to all entities that have difficulties in repaying their credit obligations, it is possible to agree on an appropriate grace period, for repayment of principal if the loan is repaid in annuity for a period longer than six months, extension loan repayment period, extension of maturity for repayment of loans with one-time maturity, and which type includes revolving loans, as well as overdrafts transaction account approved for a period longer than six months, approval of additional funds to overcome current liquidity difficulties, and other measures that prove to be adequate in each case, and which the client and the bank establish after assessing the overall situation. These modalities regarding the repayment of credit indebtedness and other bank indebtedness can greatly facilitate the overcoming of the crisis for economic entities, given that if they do not work or work with reduced capacity, it is impossible to expect the proper execution of their regular credit obligations. However, it is important to note that such measures can be granted only to economic entities that did not have delays in payment for more than 90 days at the time of the situation, ie that they regularly or mostly regularly fulfilled their obligations to banks. A similar measure was adopted in relation to microcredit organizations, ie which regulates in an almost identical manner the possibilities of benefits and special measures for clients affected by the negative consequences of Covid-19 viral disease, which is provided by the Decision on temporary measures to microcredit organizations to mitigate negative economic consequences. Covid-19 disease, published in “Sl. gl. RS “no. 30/20 from 1.4.2020. years and which entered into force on 2.4.2020. years.
  • In addition to the above measures, the Government of the Republika Srpska has not neglected agricultural producers, which are an important factor in preserving economic flows and creating new values. In this regard, the Rulebook on the conditions and manner of realization of financial incentives for the development of agriculture and villages was amended in such a way that incentive funds can be realized by agricultural farms that did not report the obligation to contribute to 2019 and did not settle obligations based on hail protection. , and it is possible to exercise the right to incentives for regressed diesel fuel, milk premiums and premiums for the production of mercantile wheat for 2020, which greatly increases the number of agricultural holdings that can receive incentives, and thus create new production and agricultural values that provide adequate reserves

Unlike the Republika Srpska, which has already adopted concrete measures to mitigate the negative consequences of the Covid-19 virus pandemic and which have entered into force, the Government of the Federation of Bosnia and Herzegovina is due to its different status and position, ie. due to the fact that only the state of the accident was declared in the given entity, and due to its decentralized organization in terms of cantonal units, passed only the proposal of the Law on Mitigation of Negative Economic Consequences, which was forwarded to the FBiH Parliament for urgent adoption on 6.4.2020. years. It also proposed an amendment to the Labor Law, in order to adequately regulate the issue of shortening and redistribution of working hours, sending workers on paid and unpaid leave and annual leave, all in order to provide certain benefits to employers and apply measures to employees. which will be within the legal framework. The proposal of the Law on Mitigation of Negative Economic Consequences implies:

Subsidizing contributions for compulsory insurance, in the amount of 244.85 KM per month, or in the prescribed amount for sole proprietors, for each employee starting from the calculation and payment of gross salary for April 2020 and each subsequent month, including the calculation for payment of salary after the cessation of the state of the accident, provided that the business entities and entrepreneurs have paid their obligations for contributions and income tax as of February 2020 and regardless of the fact whether they are business entities that are in the fiscal system;
Suspension of calculation and payment of default interest on public revenues for the duration of the accident and 90 days from the termination of the declaration of the accident;
Abolition of the obligation to pay an advance on income tax;
Abolition of obligations to pay advance income tax on self-employment;
Termination of all administrative, litigation, non-litigation and enforcement proceedings during the state of the accident, until the expiration of the 10th day from the day of termination of the said state;
Termination of calculation of default interest on late payments in debtor-creditor relations starting from 1.3.2020. years until the expiration of the 30th day from the day of termination of the accident;
Termination of forced collection;
Maintaining stability and timely payments of pensions, disability benefits and other social benefits that will be provided by savings within the budget of the Federation of BiH for 2020;
Postponement of the application of regulations concerning the intended use of funds during the state of the accident and 180 days after the cessation of the accident;
Establishment of the Guarantee Fund to be issued by the Development Bank of FBiH and whose initial funds in the amount of 80,000,000.00 KM will be provided from the available funds of the Government of FBiH from commission transactions and earmarked deposits.

However, this proposal of measures has not yet entered into force, ie it has not been adopted by the FBiH Parliament, so that in the territory of this entity only those measures are currently in force and adopted at the cantonal levels, which have the discretion to with the state of the pandemic on their territory, adopt appropriate economic measures in accordance with the available funds from the cantonal budgets. What is important to point out is that the Coordination Committee for Stabilization of the Economy and Rehabilitation of the Negative Consequences of the FBiH Pandemic has proposed a number of activities in cooperation with the FBiH Government, such as the establishment of a special fund for economic stabilization to support export companies. from other sectors, especially transport and tourism, support for the restructuring of credit arrangements by regressing interest rates provided that employees are not laid off, the establishment of a guarantee fund, the introduction of a moratorium on loan repayment for entities whose business is threatened by the pandemic, and the establishment of appropriate credit line for such economic entities by the FBiH Development Bank and a number of other measures.
In addition to the above measures adopted at the entity levels to mitigate the negative consequences of the Covid-19 virus in relation to economic entities, local self-government units themselves, in accordance with their capabilities, have adopted certain economic measures to facilitate overcoming the crisis for all economic entities banned. , difficult or largely unprofitable due to the new situation. The Capital of the Republika Srpska, Banja Luka, has adopted a number of economic measures that provide additional relief to business entities (legal entities and sole proprietors) whose headquarters are in the city and which are prohibited, restricted or hindered from performing activities based on acts of the Republic / City Headquarters. emergency situations, and for tenants of business premises who are in a contractual relationship with the City. So, on 15.4.2020. A public call for business entities in the city of Banja Luka was published in 2006, which envisages the following measures to mitigate the economic consequences caused by the Covid-19 disease caused by the SaRS-CoV-2 virus:

Subsidies for the amount of the utility fee for displaying the business name for the months of March, April and May 2020, in the amount of 100% for business entities that are prohibited from performing activities, or in the amount of 50% of the aliquot part of the utility fee for business entities whose work is limited or difficult to perform activities. This subsidy applies only to those entities that as of 31.12.2019. have no due and unpaid obligations to the City of Banja Luka on the basis of the communal tax for highlighting the business name, and the deadline for submitting the application for this type of subsidy is 31.12.2020. years.
Subsidies for compensation for the occupation of public areas for the months of March, April and May 2020 in the amount of their obligation of 100% for business entities whose work is prohibited, or in the amount of 50% for business entities whose work is restricted. This subsidy refers only to those business entities that as of 31.12.2019. have no due and unpaid obligations to the City of Banja Luka on the basis of fees for the occupation of public areas, and the deadline for submitting applications for this type of subsidy is 31.12.2020. years.
Subsidy of the amount of regular interest on loans for business entities that borrow on credit to finance working capital or fixed assets for liquidity or to refinance loans, where the loan amount does not exceed 50,000.00 KM, and the loan agreement is concluded after 12.4.2020. years and the loan repayment period is not longer than three years. The subsidy may be granted if the interest rate is up to 3.5% on the agreed total amount of regular interest, or if the interest rate is higher than 3.5% on the agreed loan amount, including variable interest rate – for part of the regular interest calculated at the rate of 3.5% on the agreed loan amount, and the remaining difference falls on the subsidy beneficiary. This subsidy can be granted to entities that on 29.2.2020. have no due and unpaid obligations to the City on any basis, and the deadline for submitting applications for this type of subsidy is 31.12.2020. years.

Approval of the moratorium on debt repayment that business entities are obliged to pay in favor of the budget of the City of Banja Luka, and which have concluded contracts and agreements on out-of-court and court settlements on deferred payment of debt based on fees, charges and other debt. The moratorium, ie the delay in debt repayment, can be temporarily postponed for up to six months, and after the expiration of the approved deadline for deferral of payment, it continues in the way that the repayment period is extended for the approved period, noting that no interest will be charged during the moratorium period. . The beneficiary of the moratorium can only be a person who on 1.3.2020. There are no overdue, but unsettled obligations towards the City on the basis of concluded contracts or agreements, while the deadline for submitting the application is June 30, 2020. years.
Tenants who are in a contractual relationship with the City on the basis of a commercial lease agreement or are tenants under special conditions, who are prohibited from working or limited working hours, for a period of three months in 2020 for commercial tenants, are exempt from paying rent. whose predominant activity is covered by the work ban and for tenants under special conditions, ie for a period of two months for tenants whose predominant activity is covered by the limitation of working hours. The deadline for submitting applications for this type of relief is 31.12.2020. years.

When it comes to Bijeljina, as one of the most important and developed cities in the Republic of Srpska, at the session of the Assembly of the City of Bijeljina held on April 16, 2020. A number of economic measures were adopted in 2006, also to prevent negative consequences for business entities caused by the Covid-19 virus pandemic, and which consist of:

Approval of a moratorium on the payment of due installments for compensation and rent for the arrangement of city construction land for a period of two months;
Exemption from paying rent to businessmen who use business premises owned by the city of Bijeljina, for commercial tenants who are prohibited from working for a period of three months, while for commercial tenants who are partially restricted from working for a period of two months. Also, this decision covers non-commercial users to whom the City pays rent, in the way that the same decision exempts them from paying VAT, and that the same will be paid at the expense of the City;
Giving consent to increase the Agrarian Fund by 500,000.00 KM, ie the budget on the item incentives for agricultural production in 2020, and which funds will be distributed to agricultural producers in the form of incentives, in accordance with their requirements and needs in order to facilitate agricultural activities for farmers, and in order to use as much arable land as possible for the purpose of agricultural production, ie to increase livestock, which will ultimately lead to an increase in primary production and the creation of appropriate domestic stocks to meet the market.

This text gives a brief overview of some of the measures adopted in order to mitigate the consequences of the Covid-19 virus epidemic in Bosnia and Herzegovina, and which business entities should in any case use in order to easily return to regular economic flows, normalize work. and conducting its business. It was made in order to inform all business entities in BiH, especially the clients of “Standard Group” and the Law Office Stevanović, which in these difficult times of general economic crisis and disrupted economic flows cares about its clients and their interests, and wants to timely information and use appropriate instruments, economic measures adopted at the level of entity, cantonal and local units to overcome the crisis with joint forces and continue with normal functioning and business.

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