The Association of Soft Drink and Water Producers of Bosnia and Herzegovina has expressed concern over new draft legislation on amendments to the Law on Excise Duty.
According to the proposal, a new excise of BAM 0.15 (€0.07) per litre would be introduced, on top of the existing one of BAM 0.10/litre, as in the case of beer.
The Association believes that, in the present economic situation, the introduction of the special excise on soft drinks and water would ultimately have more negative than positive effects.
It says the tax would lead to higher prices, which will affect consumers already suffering from weak purchasing power.
It would also mean that the state budget would receive less income due to lower production, reduced employment, and the growth of the black market.
Currently, taxes account for 40 per cent in the price of 1 litre of water or soft drink, while the introduction of a special excise would increase the tax share in the average price to between 45 to 50 per cent, according to estimates by the Association.
When compared to neighbouring countries, the excises in Bosnia and Herzegovina are the highest – for example in Croatia, they amount to less than BAM 0.10/liter.
Members of the Association commented that, when making any changes to the excise regime, it is necessary to consult the businesses involved, as well as conduct strategic studies on how the changes will affect the operations of local companies.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. To subscribe to ESM: The European Supermarket Magazine, click here.
