Branimir Muidza on the consequences of COVID-19: Eliminate the negative economic consequences of a pandemic by abolishing parafiscal levies

Source: SRNA

It is necessary to enable employers to pay tax-free salary increases or work in difficult conditions bonuses, and to adopt the program "corona loan for working capital", as a measure intended for micro, small and medium entrepreneurs, proposes President of the Foreign Investors Council in BiH Branimir Muidza.

Authorities in BiH should introduce a series of measures to mitigate the negative effects of the coronavirus epidemic, including the abolition of parafiscal levies at all levels, and a reduction in electricity prices, said Branimir Muidza, president of the Foreign Investors Council in BiH.

In an interview with Srna, Muidza states that the price of electricity should be lower by 20 percent, both for the economy and for the citizens of BiH, from April 1 this year to April 1 next year, or at least until the end of 2020, but also provide a real budget to help the economy, by reallocating budget funds.

"Part of the payments for political parties, as well as part of the salaries and reimbursements of parliamentarians, should be redirected to help the economy," Muidza said, proposing that representation and capital spending should be abolished.

According to Muidza, it is necessary to enable employers to pay tax-free salary increases or work in difficult conditions bonuses, and to adopt the program "corona loan for working capital", as a measure intended for micro, small and medium entrepreneurs.

The President of the Foreign Investors Council in BiH points out that entrepreneurs should be provided with loans for the purchase of working capital under more favorable conditions.

"The maximum interest rate on loans up to 50,000 KM or 100,000 KM for working capital should be 0.5 percent, with a repayment period of up to five years, with a shortened procedure for processing applications and without paying any additional fees, but according to pre-established transparent criteria", suggests Muidža.

He explains that the user of such a loan would have to prove the negative impact of the epidemic on business by showing a drop in income, while the loan amount could not exceed the negative financial effect, and the funds could not finance existing loan obligations or pay liabilities incurred before February.

According to him, one of the measures to mitigate the consequences caused by the corona virus is the delayed payment and longer-term repayment of loans to farmers for at least a year.

Muidza believes that the competent institutions in BiH should provide funds for the purchase of agricultural and food products produced in the country, and that this would ensure the supply of end consumers.

He stated that public and state companies should be forced to pay their contractual obligations to the real sector within the legal deadline of 60 days, and that the continuation and intensification of the construction of the Corridor "Vc" and other capital investments is one of the key measures for economic survival of domestic companies.

"In the given situation, it is indisputable that investors will take prudent financial actions, both preventive and corrective, in order to provide overall financial liquidity," Muidza said.

According to his assessment, this means that many potential investors will adjust their investment decisions to the changing reality, and, in order to keep their investments liquid, many investors will focus on short-term goals.

Muidza states that FIC members did not stop doing business during corona virus outbreak, but there was a general decrease in the volume of work, difficult business conditions, and a decrease in exports, and thus a drop in income.

"It is expected that the plans for reinvestment of profits this year will probably be postponed in order to compensate for certain losses," Muidza said for Srna, adding that the company budgets for 2021 will be mostly adopted in the last quarter of this year, when the effects can be more realistically assessed.

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