The Draft Law on Amendments to the Law on Contributions has been approved

25.02.2025.

The Government of the Federation of Bosnia and Herzegovina adopted the Proposal for Amendments to the Law on Contributions, which reduces the aggregate contribution rate from 41.5% to 36%. This decision, made at the proposal of the Federal Ministry of Finance, represents a significant step towards creating a more favorable business environment, especially for sectors with high growth potential, such as the IT industry.

What do the changes bring?

The proposed changes to the law include a reduction of contributions for pension and disability insurance at the expense of the employer by 3.5 index points, as well as a reduction of contributions for health insurance by 2 index points. These changes are expected to reduce labor costs and allow employers more room for new investment and employment.

The draft law was previously considered and accepted at the session of the Economic and Social Council for the FBiH territory, and now it enters the parliamentary procedure, where it will be considered in a shortened procedure. Its implementation is planned from July 2025.

Impact on the IT sector

Given that the high workload is one of the key challenges facing the IT industry in Bosnia and Herzegovina, Bit Alijansa continuously advocated for fiscal reforms that would facilitate business and increase the competitiveness of companies on the domestic and international markets. We are glad to see that the first steps in this direction have finally been taken.

The reduction in contributions brings relief to employers in the IT sector, allowing them to better reward their employees, expand teams and invest in innovation. Nevertheless, in order to achieve a real effect on the growth of the digital economy, it is necessary to continue with broader reforms of the tax and fiscal system.

Bit Alliance will continue to monitor the further development of this initiative and advocate for reform measures that will improve the business environment for the IT sector and the economy as a whole in the long term.