The Minister of Economy and Entrepreneurship of Republika Srpska, Vojin Mitrović, stated that there is a significant interest from foreign investors in investing in Republika Srpska, which offers a favorable tax policy, the lowest electricity prices, infrastructure, and proximity to the EU.
“All these factors attract business people from the EU to invest in Republika Srpska,” Mitrović said.
He mentioned that he sees no reason for companies from Republika Srpska to relocate their operations to the Federation of Bosnia and Herzegovina after the minimum wage was increased from 700 to 900 KM.
“The minimum wage in the Federation of BiH is 690 KM, the income tax is 10 percent, while it is 8 percent with us. The cumulative rate of taxes and contributions in Republika Srpska is 31 percent, and in the Federation of BiH, it is 41.5 percent. The income tax and VAT are the same. So, I see no reason for employers from Republika Srpska to move to the Federation of BiH,” Mitrović told “Večernje Novosti.”
He assessed that for business people, the problem is not the higher minimum wage but the payment of salaries “under the table.”
“With a minimum wage of 900 KM, the Government of Republika Srpska has targeted this segment of the economy. I expect there to be fewer companies that pay part of the salary in envelopes,” said Mitrović.
He noted that there is a certain number of businessmen in Republika Srpska who make extra profit yet apply for incentives to increase wages for their workers.
“It means that even those who make an extra profit do not want to allocate a single mark for increasing workers’ salaries,” Mitrović said.
He opined that the increase in the minimum wage is certainly a burden for some economic entities, but that the number is not too large, and that it will achieve a long-term effect.
“By increasing the minimum wage, worker satisfaction will be greater, as will their productivity at work. It is certain that the outflow of the workforce will be reduced, as this increase will contribute to preserving jobs. The Government will monitor the business people over the next two to three months and will respond with measures if necessary,” Mitrović said.
Source: Glas Srpske
