The Stand-By Arrangement with Bosnia and Herzegovina was approved on May 29, 1998. Bank regulation and supervision have been strengthened over the past year, although procedures continue to fall short of best practice in some areas. The authorities have reformed the sales tax regime to equalize tax rates in the two entities, broaden and unify the base, and simplify the tax system in a broadly revenue neutral manner. IMF staff urged the authorities to accelerate the implementation of modern treasuries.

Abstract

The Stand-By Arrangement with Bosnia and Herzegovina was approved on May 29, 1998. Bank regulation and supervision have been strengthened over the past year, although procedures continue to fall short of best practice in some areas. The authorities have reformed the sales tax regime to equalize tax rates in the two entities, broaden and unify the base, and simplify the tax system in a broadly revenue neutral manner. IMF staff urged the authorities to accelerate the implementation of modern treasuries.

May 25, 2001

This statement updates the information presented in EBS/01/71 (5/10/01) as regards the implementation of prior actions.

On May 15, 2001, the Federation House of Representatives passed sales tax legislation which was still pending when the Staff Report was issued. The Federation legislature amended the legislation in order to introduce two new exemptions, for inputs to beekeeping and for liquid petroleum gas destined for industrial use. In the staffs assessment these two amendments, which should be of minor financial impact, do not run counter to the spirit of the reform since they affect inputs to production.

Bosnia and Herzegovina: Sixth and Seventh Reviews Under the Stand-By Arrangement and Request for Waiver of Performance Criterion
Author: International Monetary Fund