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Press release following the 47th Government session – the Proposal of the 2024 Budget and the 2024-2026 Economic Reform Program approved

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During its 47th session held on 1 December 2023, the Government of the Republic of Srpska approved the Proposal of the Budget of the Republic of Srpska for 2024 in total amount of BAM 5,735,000,000, which is 212 million or 4% more compared to the 2023 Budget Rebalance.

Tax revenues according to the Budget Proposal for 2024 amount to 4.2 billion and are by 10% higher while non-tax revenues are higher by 16% compared to this year’s Rebalance.

When it comes to budget allocations, it is planned that one billion and 785 million will be allocated for pensions that is 11% more compared to the Rebalance for 2023.

Disbursements on the account of pension insurance are planned according to the current trend in the number of pension beneficiaries and the expected number of beneficiaries in the coming period, as well as the regular adjustment of pensions in 2024 by 9.0%.

The amount of funds allocated for veterans’ benefits will be 38% higher compared to the Rebalance and will amount to a total of 467.5 million.

The 2024 Budget Proposal plans funds for harmonization of salary coefficients of employees with higher education qualification in the sector of education and culture whose salary coefficient is lower than the salary coefficient of the fifth salary group (senior professional associate with a higher professional qualification) defined by the Law on salaries of employees in administrative bodies. The harmonization referred above is defined by the Agreement on  dynamics of harmonization of salary coefficients of employees with higher education in the field of education and culture of the Republic of Srpska signed between the Ministry of Education and Culture, the Ministry of Scientific and Technological Development, Higher Education and the Trade Union of Education, Science and Culture of the Republic of Srpska. Also, in accordance with the Law on Salaries and Remuneration of Judges and Public Prosecutors in the Republika Srpska, the budget proposal has planned funds for increasing the salaries of judges and prosecutors in the amount of 4.1 million.

According to the budget proposal, expenditures on the account of the use of goods and services amount to 200.3 million and the most significant funds in this section are allocated for the costs of electricity, communal, communication and transport services and professional services.

Within this item, support for humanitarian and socially accountable actions is planned, as well as funds for the Project of construction, adaptation and equipping of facilities for children and youth in total amount of 50 million BAM.

Remittances on the account of social protection, personal, family and civil disability benefits, social protection, veteran’s allowances, solving the problems of refugees and displaced persons, scholarships and transportation of students paid from the budget will amount to 512.5 million which represents an increase of 136.3 million, i.e. 36% compared to the funds planned by the Rebalance.

The increase in this group of expenses is largely the result of the increase in remittances for the monthly veteran’s allowance in the amount of 126.6 million. From January 2024, it is planned that the monthly veteran’s allowance will be calculated on the basis of 3 BAM per month spent in the combat zone.

Remittances for family, personal and civil disability benefits were also increased, in the total amount of 15.4 million KM.

Within this group of expenditures, funds are planned for providing financial assistance to unemployed parents of four or more children in the Republic of Srpska in the amount of 60 million, which is in accordance with the number of beneficiaries of this right.

According to the budget proposal, allocations for the Health Insurance Fund will be 246 million  while the amount designated for the Child Protection Fund will be 40 million KM.

When it comes to supporting the economy, 14.6 million are planned for the introduction of new technologies, 15.6 million for increasing the wages of workers and 5 million for the return of taxes and contributions for new employment of workers.

The funds intended for the program of social care for workers are planned in the amount of 6 million.

According to the budget proposal of the Republic of Srpska for 2024, a budget deficit in the amount of 200.7 million is planned, which in relation to the amount of the budget deficit of 255.4 million, defined by the Rebalancing of the budget of the Republic of Srpska for 2023, represents a decrease of 54 6 million KM.

At the 47th session of the Government, the proposal of the Economic Reform Program of  Republic of Srpska for the period 2024-2026 was established and approved. It was prepared on the basis of strategic documents of the Government and with contribution of social partners and in accordance with the guidelines of the European Commission.

In the coming period, the initiatives and multi-year reform processes defined through the reform pillars which realization started in the previous period will be continued and relate to economic growth, digitization, reform of public enterprises, health and social policy and demographic renewal of the Republic of Srpska.

In the next two years, it is proposed  that seven structural reforms should be implemented that are divided into three narrow areas: competitiveness, sustainability and resilience, and human capital and social policies. The plan is to improve the competitiveness of the economy through support for technological development and strengthening of value and supply chains, increasing the efficiency of public enterprises and their restructuring, energy transition, accelerated digital transformation, modernization and renovation of transport infrastructure in accordance with the goals of the Green Agenda. Also, greater employment is planned through better alignment of education and development of practical knowledge and skills on the labor market, as well as improvement of the quality and efficiency of institutional mechanisms for the provision of social and health care services.

According to the projections of the Program of Economic Reforms, the rate of economic growth of the Republic of Srpska in the years 2024, 2025 and 2026 will be 3.0%, 3.2% and 3.5% respectively.

The Government also approved the Proposal for a decision on long-term borrowing of the Republic of Srpska for the year 2024, which approves long-term borrowing in the maximum amount of up to BAM 951,700,000. The plan is for Republika Srpska to take long-term debt on domestic and international financial markets in 2024, namely: BAM 141,700,000 on the domestic market and BAM 810,000,000 on the international market.

Funds obtained through long-term borrowing will be used pursuant to the Law on Borrowing, Debt and Guarantees of the Republic of Srpska for financing capital investments, refinancing the total or part of the debt of the Republic of Srpska, payment of conditional obligations based on the guarantees of the Republic of Srpska, in whole or in part, in case the debtor does not settle its financial obligations, and for financing the budget deficit in cases where the Ministry of Finance estimates that planned expenditures will be greater than the amount of planned revenues.

Also, the Proposal for a decision on short-term borrowing of the Republic of Srpska through the issuance of treasury bills for the year 2024 was determined. In accordance with the Law on Borrowing, Debt and Guarantees of the Republic of Srpska, the short-term debt of the Republic cannot exceed 8% of the amount of regular revenues generated in the previous fiscal year. According to the revenue plan from the Budget Rebalancing for 2023, the maximum amount of short-term debt in 2024 cannot be higher than 337.85 million BAM.

The government also determined the proposal for a decision on the amount of guarantees that can be issued by the Republic of Srpska in 2024. By this decision, the issuance of guarantees of the Republic of Srpska for debts in 2024 up to the amount of 500,000,000 BAM are approved provided that the total exposure of the Republic of Srpska under the issued guarantees cannot be higher than the limit defined by the Law on Borrowing, Debt and Guarantees of the Republic of Srpska, which amounts to 15% of GDP in that year.

The Government of the Republic of Srpska shall inform the National Assembly of the Republic of Srpska once a year about the liabilities for which it has issued guarantees of the Republic of Srpska through information on the debt of the Republic of Srpska.

At today’s 47th session, the Government of the Republika Srpska approved the Draft Law on Amendments to the Law on Contributions, which will immediately be forwarded to the urgent procedure for consideration and adoption by the National Assembly of the Republic of Srpska.

The reasons for adoption of this law are contained in the need to reduce the burden on educational institutions based on the obligation to pay contributions for pension and disability insurance for students during practical classes, that is, during professional practice with the employer.

The proposed law reduces the contribution base from 50% to 20% of the average gross salary in the Republic for the previous year for pupils and students during practical classes and professional practice with the employer. By applying the proposed law, educational institutions would have BAM 90,000 less obligation to calculate and pay contributions.

At today’s session, the Government of the Republic of Srpska approved the Proposal of the Law on Amendments to the Law on Income Tax. The reasons for the amendments are partly contained in the need to exempt students from income tax for practical lessons that take place in premises of the employer. Amendments to these two laws should open up the possibility of engaging a larger number of students in practical classes with employers and increasing the efficiency of educational and training process.

The second goal of the proposed amendments to the Income Tax Act is to introduce into the tax system a special self-employed tax payer – a small farmer with income less than BAM 50,000 per year. This distinguishes a small farmer from a person who performs agricultural activities in the form of an entrepreneur.

It was stipulated that family farms with an income of less than 50,000 annually pay income tax in three annual amounts, according to three taxation thresholds. Those who have less than 12,000 according to this proposal would not pay tax and those between 12,000 and 25,000 per year would pay BAM 200 per year. According to this proposal, those whose income is between 25,000 KM and 50,000 would pay BAM 400 per year on the account of tax.

Also, it was proposed that taxpayers do not have to keep business books, but their obligation is determined on the basis of the income statement. The administrative obligations of farmers will be an annual declaration of income so that the Tax Administration can determine the amount they are obliged to pay on an annual basis.

At the session of the Government, the Draft Law on Amendments to the Law on Writing off of Receivables was approved which establishes legal prerequisites for more efficient collection of tax obligations and which would facilitate the financial position of companies and improve their current liquidity, bearing in mind the current crisis on the global market.

This proposal creates a legal framework to write off interest claims for taxpayers who have outstanding tax obligations due by December 31, 2022, by paying the entire amount of the principal debt and the costs of the enforcement procedure, provided that the principal debt is settled by July 1, 2024.

At the 47th session, the Government adopted the Amendments to the Regulation on the criteria for determining beneficiaries and the method of distribution of funds from games of chance which introduced change of beneficiaries. It is proposed that 7% of the total fees from games of chance shall be distributed to the Solidarity Fund. Out of the total funds, 37% would be directed to the Ministry of Health and Social Protection, 25% to the Ministry of Family, Youth and Sports, 25% to the Ministry of Education and Culture, 13% to the Ministry of Labor and Veterans’ Disability Protection, while 4% to line ministries. Those funds would be used for  projects and programs that deal with social protection and humanitarian work, issues and needs of persons with disabilities, problems of employment of veteran categories, pro-natal policy, culture, non-institutional education and upbringing of children and youth and the development of civil society and those that contribute to development of sports and the fight against drugs and all forms of addiction.

The execution of revenues on the account of fees for organizing games of chance in the budget of the Republic of Srpska as of November 22, 2023 amounted to 95.6 million BAM and it is expected that this amount will reach 105 million by the end of the year 2023. Accordingly, when planning the distribution of funds from games of chance in the budget of the Republic of Srpska for the year 2024, the estimate from the year 2023, i.e. 105 million, was used.

The government approved the Draft Law on Amendments to the Law on Salaries of Employees in Primary and Secondary Schools and Student Homes as well as the Draft Law on Amendments to the Law on Salaries of Employees in the Sector of Culture of the Republic of Srpska.

The reason for adoption of these laws is to harmonize the salary coefficients of employees with a higher education in the field of education and culture of the Republic of Srpska who have a salary coefficient lower than the salary coefficient of the fifth salary group defined by the law regulating the salaries of employees in administrative bodies, with the aim of improving their financial position. Also, according to the valid Law on salaries for employees in the field of culture of Republika Srpska, certain jobs in cultural institutions were not foreseen, and a correction was made and they were added to the corresponding salary classes.

The proposed laws are part of a set of measures to increase the salaries in the Republic of Srpska in accordance with the Agreement on Dynamics of harmonizing the salary coefficients of employees with higher education in the field of education and culture of the Republic of Srpska, which was signed on August 21, 2023 by the Ministry of Education and Culture of the Republic of Srpska, the Ministry of Science and Technology Development and Higher Education and the Trade Union of Education, Science and Culture of the Republic of Srpska.

Amendments to these laws represent another measure of the Government of the Republic of Srpska that contributes to economic growth and the increase of workers’ wages, as well as to the improvement of economic and social position of employees in primary and secondary schools and student homes.

These Laws will enter into force on January 1, 2024.

The Government of the Republika Srpska established the Proposal of the Law on Amendments to the Law on Salaries of Employees in the Field of Higher Education and the Student Standard of the Republika Srpska under an urgent procedure.

The reason for the adoption of this law is to harmonize the salary coefficients of employees with higher education in the field of higher education and the student standard of the Republic of Srpska with the salary coefficients of employees in administrative bodies, with the aim of improving the financial position of this category of workers. It is a question of harmonizing the coefficients of employees in higher education and the student standard, which have a salary coefficient lower than the salary coefficient of the fifth salary group defined by the law regulating the salaries of employees in administrative bodies.

The proposed law is a part of a set of measures to increase the salaries of employees in the Republic of Srpska in accordance with the Agreement on the dynamics of harmonizing the salary coefficients of employees with higher education in the field of education and culture of the Republic of Srpska, which was signed on August 21, 2023 by the Ministry of Education and Culture of the Republic of Srpska, the Ministry of Science and Technology Development and Higher Education and the Trade Union of Education, Science and Culture of the Republic of Srpska.

At today’s session, the Government of the Republic of Srpska approved the Law on Amendments to the Law on Catering Sector which establishes the Central Information System in the field of catering in the Republic of Srpska.

The central information system in the field of catering sector is single and centralized electronic information system that contains all relevant data on accommodation service providers, accommodation facilities and guests, through which their records are made and other data derived from the performance of catering and tourism activities is entered.

The adopted proposal of the Law changes the provisions related to vocational training of persons working in catering facilities of a hotel and restaurant type who directly serve guests (waiter), prepare hot and cold dishes for guests (chef), prepare and decorate hot, cold and dry delicacies (pastry chef) and the receptionist so that these persons, unlike under previous legal provisions which prescribed a mandatory secondary vocational education in these professions, may now also have some other secondary level vocational training.

Also, the proposed law defines the concept of “catering services” which enables restaurateurs to, in the case when a guest uses several services in the same catering facility, issue a prescribed invoice for all services provided to the guest upon completion of the service.

This law stipulates that the local self-government unit on whose territory the catering facility is located categorizes hostels and rural tourism facilities. Namely, bearing in mind that rural tourism is one of the leading branches of the development of the tourism sector, it is necessary to achieve certain standards in the provision of these services and thereby achieve a better offer in this area. Also, in order to increase the number of service providers in the countryside in the rural tourism facility, the limit on the number of guests who can be provided with accommodation services, i.e. food and drinks, has been lifted.

The Government of Republika Srpska approved at today’s session the Draft Law on Amendments to the Law on the Special Regime of Imprisonment.

This Law regulates the procedure of assigning prisoners serving prison sentences to the Department with a special prison sentence regime, its organization, the position of prisoners, the disciplinary and material responsibility of prisoners, as well as the treatment of prisoners serving life sentences.

The main reason for the amendments to this law is harmonization of the provisions with the provisions of the Criminal Code of the Republic of Srpska and the provisions of the Law on the Execution of Criminal and Misdemeanor Sanctions of the Republic of Srpska, as well as terminological harmonization with the provisions of the Family Law.

The amendments prescribe in more detail the manner of execution of the sentence of life imprisonment and the treatment of prisoners sentenced to this type of criminal sanction, which will be applied by the Departments of the special regime for execution of prison sentences.

In this way, the legal framework for the execution of the sentence of life imprisonment was completed and the possibility of legal gaps was eliminated.

The Government of Republika Srpska established the Draft Law on Amendments to the Law on Geological Research.

Certain provisions of the Law have been amended with the aim of encouraging economic development of the Republic of Srpska through creation of a stimulating real framework for the performance of detailed geological research.

At today’s session, the Government of the Republic of Srpska accepted the Information on the importance of hematopoietic stem cell transplantation and activities on establishing a register of voluntary bone marrow donors at the Institute of Transfusion Medicine of the Republic of Srpska.

The Government of the Republic of Srpska tasked the Ministry of Health and Social Protection to work on expanding cooperation in the field of stem cell transplantation and to prepare an agreement with competent institutions of the Republic of Serbia which would more closely regulate necessary diagnostic procedures that include preparation of donors for donating stem cells in accordance with the procedures of the Registry and the standards of the World Association of Hematopoietic Stem Cell Donors (WMDA), as well as the manner in which the costs of HLA typing of donors would be regulated when joining the Registry of Serbia.

At the same time, the Institute of Transfusion Medicine of the Republic of Srpska is tasked with continuing the development of capacities and resources in the field of HLA tissue typing, i.e. stem cells, with the aim of establishing a Laboratory for HLA tissue typing and a Registry of voluntary bone marrow donors.

The Government of the Republic of Srpska adopted today the Flood Defense Plan of the Republic of Srpska for 2024, the Plan of Activities in the Preparation and Implementation of Protection and Rescue Measures from Forest and Other Fires in Open Areas in the Republic of Srpska in 2024, the Plan of Activities in the Preparation and Implementation measures for protection and rescue from earthquakes in the Republic of Srpska for the period 2024 – 2027, and the Action Plan for implementation of measures for protection and rescue from heavy snowfall and snow of interest to the Republic of Srpska for the period 2024 – 2027.

Source: vladars.rs

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