Customs and Taxation

The Indirect Taxation Authority (ITA) as a single administrative agency established by the Law on Indirect Taxation System is the only institution dealing with revenue collection from all indirect taxes as such is very significant for budget earnings. In cooperation with other institutions and inspection services, the ITA has a considerable role in the protection of society and health of people as well as protecting environment and cultural heritage, preventing trafficking in illegal and prohibited goods and substances. One of it’s important roles is also to facilitate trade in balance with control measures. This includes simplifications for reliable economic operators and to work on a secure supply chain environment.

The customs tariff was updated in line with the 2012 version of the EU Combined Nomenclature. The International Convention on the Harmonized System for Names and Codes for Goods was ratified. Rules of origin continue to be used in accordance with the Interim Agreement. The fee for processing customs declarations was abolished. Electronic prior declaration of data from the TIR carnet was introduced. Implementing legislation for customs enforcement of intellectual property rights was adopted. The customs law and legislation on free zones remain to be aligned with the EU Customs Code. The lack of a fully developed risk analysis results in frequent and poorly targeted customs controls. Progress on the use of simplified procedures and trade facilitation remains limited. Further efforts are required in this area, including development of the concept of ‘authorised economic operator’ Closer cooperation is essential, particularly between the ITA and the Agency for Statistics of Bosnia and Herzegovina. IT systems are not fully in line with EU requirements.

The functions performed by customs laboratories remain limited. Bosnia and Herzegovina should invest further in IT interconnectivity and interoperability with EU IT systems. It is not yet sufficiently prepared for accession to the Common Transit Convention (CTC) or the Convention on Simplification in Trade in Goods. By expressing its intention to join the CTC and by planning the IT application concerned (NCTS), Bosnia and Herzegovina would achieve a milestone in IT interconnectivity with EU IT systems.

The previous tax and customs administration of the Entities and late the ITA have been supported through Customs and Fiscal Assistance Office (CAFAO) programme and afterword through Technical Assistance to Customs and Tax Administrations (TACTA) programme which ended in 2009. Currently, the ITA is benefiting from the large scale twinning project aimed to assist the ITA in the areas of customs, taxation and information technology. The continuation of technical assistance is foreseen for the next period but also the modernisation of the customs declaration processing system.