They cited several reasons why they consider this decision unfavorable:
The decision was made on December 30, 2024. with application from January 1, 2025, which in practice means that companies are not left with enough time to adjust their financial plans for 2025 due to a significant increase in costs, to communicate with owners abroad and to reorganize work to try to reduce the effects of this decision;
Most of the members of the Representation of the German economy in Bosnia and Herzegovina have long-term contracts with their customers, so it is not possible to calculate this significant increase in costs in the final price of the product;
A significant negative effect on the competitiveness of FBiH as a location for attracting foreign investments – the increase means that the total cost of the minimum wage in the FBiH is 1,744 KM (849 euros), while in Hungary the total cost of the minimum wage is 348,800 forints (849 euros at the latest exchange rate). Therefore, the cost of the minimum wage in a member of the European Union, which is located in the immediate vicinity of the main export markets, is even five percent lower than in FBiH;
The decision on the amount of the minimum wage for 2025 is completely contrary to the announcements that came from the Government of FBiH throughout the year – reduction of the tax burden, extension of decisions on non-taxable earnings of workers, etc.
As emphasized by the Representative Office of the German Economy in Bosnia and Herzegovina, the effects of such a decision are serious and significant.
“The increase in the cost of the minimum wage is significantly higher than the expected increase in inflation. On the other hand, in the last four years, we have had a continuous increase in the minimum wage at rates higher than in the EU or in other neighboring countries. Such a situation cannot be amortized by a sudden increase in worker productivity. Therefore, we witnessed a large number of closures of companies in labor-intensive areas”, they stated.
As they warned, this decision punishes a large number of our members who used earlier and favorable decisions of the FBiH Government and used the opportunity to pay workers additional funds without tax burden.
“Thus, our members were harmed by this decision, without any significant benefit for the workers. Employees with starting salaries of our member will not have higher incomes, and the member will be additionally burdened with an additional tax burden”, they add.
They called on the FBiH Government to withdraw the aforementioned decision, to extend the decision on the payment of tax-free aid for the whole of 2025, and not to make such decisions hastily and without considering the real effects.
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