The Ministry of Economy and Entrepreneurship of the Republic of Srpska is dedicated to enhancing the quality of life for its citizens through a comprehensive approach to economic development. We talked with Minister Vojin Mitrović about key goals and strategies, but also about cooperation with the civil and private sector.
What are the key objectives of your Ministry in terms of improving the quality of life for the citizens of the Republic of Srpska, and how do you plan to achieve them?
Improving the quality of life of the citizens of the Republic of Srpska is a process that requires a multisectoral approach and continuous work. The Ministry of Economy and Entrepreneurship, in accordance with its competences, aims to support the economy and the improvement of business environment, which creates the conditions for better-paid and better-quality jobs. Significant progress was made in the previous period to create a better business environment and reduced business costs for the business community. Some of the examples: we have significantly reduced tax and non-tax benefits. We will mention a few: reduced income tax for personal income from 10% to 8%; increased basic personal deduction from BAM 700 to BAM 1000; reduced contributions to salaries from 32.8% to 31%; enabled reimbursement of maternity leave in the 100% amount (on this basis alone, savings of BAM 60 million per year were ensured for the business community); reduced non-tax benefits (the special republic administrative fee was abolished, numerous administrative and court fees and on this basis, ensuring savings of an additional BAM 30 million KM per year for the business community); introduced incentives to increase wages; introduced incentives for new technologies, refund of taxes and contributions for newly employed workers, reduction of the tax base of profit tax for new investments, etc. Based on the analysis of the data in relation to the region and Europe, this makes us extremely cost competitive. The process of improving the business environment will continue in the coming period. The Law on Incentives in the Economy of the Republic of Srpska established a framework for awarding incentives to business entities for increasing workers’ salaries. Incentives for increasing workers’ salaries are aimed at eliminating the grey area in the area of workers’ salaries and transferring the entire amount of money that the worker receives from the business entity into legal flows. This measure provides the continuity of activities aimed at suppressing the grey economy and thereby improving the position of workers and unemployed persons, as well as improving the business environment. The Ministry of Economy and Entrepreneurship has approved for nine accounting periods (from July 2019 to December 2023) incentive funds for the increase of workers’ salaries in the total amount of BAM 72.9 million, 5,620 submitted requests from business entities or 92,9%. Beneficiaries of incentives were 1,613 different economic entities that increased wages for 62,194 workers. By disbursing these funds, we have improved the position of workers, in terms of determining higher monetary benefits based on salaries and maintaining the increased salaries of workers for a longer period of time, as well as removing the grey zone in the area of paying workers’ salaries and directing the entire amount of money that the worker receives from the business entity into legal flows. This measure provides the continuity of activities aimed at suppressing the grey economy and thereby improving the position of workers and unemployed persons, as well as improving the business environment. Also, with this measure, the conditions for the remaining workforce in the Republic of Srpska have been improved, by giving employers the opportunity to increase workers’ salaries, in such a way that an incentive will be provided for the amounts of higher paid contributions, which leads to a burden reduction. It is important to emphasize that in the Budget of the Republic of Srpska for 2024, funds in the amount of BAM 15,560,000.00 are planned for incentives to increase the salaries of workers. Finally, it is important to emphasize that by applying the Law on Incentives in the Economy of the Republic of Srpska, from July 2019 to December 2023, incentive funds in the amount of BAM 111.8 million were approved for the implementation of the above measures.
What strategies is the Ministry developing to enhance social inclusion and support diversity in the Republic of Srpska?
In the Republic of Srpska, the Law on Social Entrepreneurship of the Republic of Srpska was adopted in 2021, which was prepared by the Ministry of Economy and Entrepreneurship of the Republic of Srpska. The Law regulated this area in the legal system for the first time and regulated the concept, goals and principles of social entrepreneurship, the conditions and procedure for acquiring the status of a social enterprise and keeping the registry of social enterprises. Based on the Law, in 2022 the following were adopted: Rulebook on the content and form of the request for acquiring the status of a social enterprise and Rulebook on the content and manner of keeping the registry of social enterprises. Support for social entrepreneurship is also envisaged in the Strategy for the Development of Small and Medium Enterprises of the Republic of Srpska for the period 2021-2027. Investing profits in employment, social and health services, education, environmental protection and cultural activities in the community is called social entrepreneurship. According to the aforementioned law, a social enterprise is a legal entity (company, foundation, association, cooperative, institution) that receives status from the ministry based on the performance of activities from which a narrow or wider social community derives special benefit. The profit of the social enterprise is distributed to cover business costs, but also to achieve social goals such as employment of vulnerable categories, investment of profits in cultural, sports and other community activities, and direct support for civic actions in the community. The conditions for acquiring the status of a social enterprise are: being registered as a legal entity; having its headquarters in the territory of the Republic of Srpska; regarding the total number of employees, there are at least 30% of persons who belong to the category of persons with difficulties in finding employment if they are fulfilling a social mission on the basis of employment; it was established with the aim of achieving a social mission; the business is based on a limitation in the distribution of achieved profits; the employees participate in considering decisions for the adoption of which it is necessary to obtain their opinion in accordance with this law; and the social mission is clearly expressed. The social mission is achieved in one of the following ways (by fulfilling one of these, the status is acquired): 1) by hiring categories of persons with difficulties in finding employment while their status lasts, namely: – persons who have been unemployed for more than three years, persons over 50 years of age, children of killed soldiers, persons with disabilities, soldiers disable in war and demobilised soldiers, civilian victims of war, persons who have been victims in criminal proceedings, members of national minorities, pregnant women and single parents, persons with socially unacceptable behavior, victims of abuse of psychoactive substances, victims of domestic violence, victims of human trafficking and persons in a state of social need due to poverty, natural disasters, war suffering, refugees, migration, repatriation, death of one or more family members, long-term medical treatment, serving a sentence, discharge from institutions or other unforeseeable circumstances, – other persons who are in the category of persons with difficulties in finding employment in accordance with the regulations regulating the field of employment, 2) by performing work in any activity that achieves social goals, 3) by financing projects of legal entities that achieve social goals. After the adoption of laws and regulations, the Ministry granted the status of social enterprises to 6 entities, namely: Humanitas Banja Luka, General Agricultural Cooperative “Žena” Bratunac, General Agricultural Women’s Cooperative “Kreativna vizija” Rudo, “Ženska zadruga” Bijeljina, Agroplan Bijeljina and Patriot Bijeljina. In addition to social entrepreneurship, the Ministry provides support for the development of women’s entrepreneurship through the creation and implementation of a special strategic document in this area, which foresees financial support, education, promotion and support for networking and association of women. A new strategic document in this area is being drafted. The business community is our key partner and we treat it carefully. There are institutional mechanisms of cooperation, such as formalised bodies for cooperation (working groups, councils, etc.), but we consider equally important, if not more important, the cooperation that arises from the daily communication we have with the economy. In doing so, we are talking about the large as well as micro economic entities. Both are important for the development of society. We have also developed a special mechanism for post-investment support (aftercare), which includes monitoring investments, together with local self-government units. The goal of this programme is to see the real situation on the ground, to support investments with capacity for development, to remove difficulties in the business of those investments that have a real problem, but also to receive suggestions for improving business conditions.
How does your ministry cooperate with civil society and the private sector in achieving common goals and improving the well-being of the community?
The Ministry of Economy and Entrepreneurship in the field of small and medium-sized enterprises has excellent cooperation with the Chamber of Commerce of the Republic of Srpska and the Chamber of Crafts and Entrepreneurship of the Republic of Srpska as representatives of the interests of companies and independent entrepreneurs in the Republic of Srpska. Cooperation exists in the preparation of regulations, strategic documents, action plans and other documents, the implementation of projects as well as other activities such as education and promotion of economy and entrepreneurship. In the previous period, the Ministry cooperated with the EDA Enterprise Development Agency Banja Luka and representatives of the civil sector such as: Women’s Interactive Rural Centre East Sarajevo, Lara Foundation Bijeljina, Link Association Mostar and other important organisations with which projects and various manifestations were implemented.
In what ways is your ministry working to enhance transparency, accountability, and good governance practices within the Republic of Srpska?
In the field of small and medium-sized enterprises and entrepreneurship, all regulations and strategic documents are adopted through public consultations at the Ministry’s website and obtaining opinions from competent ministries and other national and local institutions, as well as organisations such as the Chamber of Commerce of the Republic of Srpska and the Chamber of Crafts and Enterprises of the Republic of Srpska. Also, the Ministry held public hearings in six cities of the Republic of Srpska during 2021 regarding the Law on Social Entrepreneurship of the Republic of Srpska and in 2024 regarding the Law on Independent Entrepreneurs. The debates are very important because of the more detailed familiarisation of the public with the provisions of the law and obtaining comments and opinions on the proposed legal solutions. In the previous period, a series of projects were launched aimed at improving the transparency of our work, as well as the work of other ministries of the Government of the Republic of Srpska, concerning the availability of information. Thus, the Republic of Srpska was the first in the region to establish a public and regularly updated registry of all administrative procedures (pscsrpska.vladars.net). Through this portal, the business community can ask questions related to business, and so far, more than 1000 such questions have been answered. We have made publicly available the registry of incentives to the economy, both national and local (regpodsticaja.vladars.net), we have established a website intended for foreign and domestic investors with all data on the requirements and costs of doing business (investsrpska.vladars.net).
