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Tag: Bosnia and Herzegovina

  • Bosnia and Herzegovina Raises Cigarette Duty

    Bosnia and Herzegovina Raises Cigarette Duty

    Cigarette prices in Bosnia and Herzegovina increased on January 1 after a higher minimum excise duty came into force under a decision by the Board of Directors of the Indirect Taxation Administration (ITA). The minimum excise duty for 2026 was raised by 0.19 BAM ($0.11) per pack, setting the rate at 188.50 BAM ($113.10) per 1,000 cigarettes, or 3.77 BAM ($2.26) per pack of 20, up from 179 BAM ($107.40), or 3.58 BAM ($2.15), last year.

    The specific excise duty on cigarettes remains unchanged at 1.65 BAM ($0.99) per pack of 20. Meanwhile, excise duty on smoking tobacco has been set at 80% of the minimum cigarette excise, increasing to 150.80 BAM ($90.48) per kilogram in 2026 from 143.20 BAM ($85.92) in 2025.

    The ITA Management Board also confirmed that the compensatory interest rate for the period from January 1 to June 30, 2026, will remain unchanged at 12%.

  • Bosnia and Herzegovina Tax Collections Plunge

    Bosnia and Herzegovina Tax Collections Plunge

    Photo: Frank Parker

    Income from excise taxes on domestic tobacco and tobacco products in Bosnia and Herzegovina (BiH) has decreased one hundredfold in six years, reports The Sarajevo Times, citing data from the BiH Indirect Taxation Administration (ITA). 

    According to the data, during the last year, BiH received about BAM2 million ($1.13 million) from excise taxes on tobacco and tobacco products compared to hundreds of millions in previous years. 

    “Thus, in 2009, based on these excise taxes, BAM171 million was earned; in 2010, BAM216 million; in 2011, BAM240 million; in 2012, BAM231 million; in 2013, BAM207 million; in 2014, BAM203 million; in 2015, BAM233 million; in 2016, BAM207 million; in 2017, BAM190 million,” the ITA data states. 

    The shutdown of tobacco factories in Banja Luka, Sarajevo and Mostar contributed most to the decrease. 

    Tobacco cultivation has slowly declined. “My wish is to maintain tobacco production, to gradually, in agreement with the relevant ministry and local self-government, try to return that production to some values that were in previous years,” said Svetozar Mihajlovic, owner of Duvan, one of the few remaining companies purchasing leaf.  

    “So, we see that domestic industry is practically shut down, and that is the best explanation of this indicator,” said economist Slavisa Rakovic. “If domestic industry had been maintained, not only would we have revenues from excise taxes at a much higher level, but the level of added value through processing would have been much higher, and taxes and contributions from employees’ salaries would have been significant. But what can be done …. It can be expected that with such policies, we will wait for the day when it is not worth doing anything here but to deal with politics.”

  • Black Market Thrives in Bosnia and Herzegovina

    Black Market Thrives in Bosnia and Herzegovina

    Image: butenkow | Adobe Stock

    About 49 percent of citizens in Bosnia and Herzegovina buy tobacco products from the black market, according to 2020 research data published by the Center for Policies and Management, a Sarajevo think tank organization that deals with European integration and public administration reform, reports the Sarajevo Times.

    The legal sale of cigarettes decreased by 7.6 billion cigarettes per year from 2008 to 2020, though the number of smokers did not significantly decrease. The Liberal Forum, a nongovernmental organization, suggests that that means smokers turned to the black market for cheaper products.

    Illegal cigarettes and tobacco are often smuggled into Bosnia and Herzegovina from Montenegro, Serbia and Albania; Bosnia and Herzegovina is a transit country on the international smuggling route leading to European Union countries, according to the Indirect Tax Administration.

    The Bosnia and Herzegovina prosecutor’s office filed indictments against 13 people this year for illegal tobacco product trade, three of whom were border police members.

  • Dubai Businessman Buys Mostar Tobacco Factory

    Dubai Businessman Buys Mostar Tobacco Factory

    Photo: Freesurf

    Jassim Abdullah Ibrahim Alhuwai is buying the Mostar Tobacco Factory in Bosnia and Herzegovina after making the best offer at public sale, reports the Sarajevo Times.

    Alhuwai will pay BAM6 million ($3.4 million) for the factory. He has already paid BAM10,000 as a deposit and has been given a deadline of April 22 to pay the remainder.

    “I hope that the investor from Dubai will pay the money by the appointed deadline and that our agony will end, that there will be the bridging of our service periods and that some money will be paid to us,” former Mostar worker Aida Kajtaz said.

    This was not the first attempt to sell the factory. Previously, Mirsad Rahimic, a Swiss entrepreneur and Mostar native, attempted to buy the factory, but there were a number of complications that arose during the purchase process.

    Production at the factory ended in 2007, but workers campaigned to restart manufacturing.  

    Mostar Tobacco Factory complex has an estimated value of BAM21 million, but due to lawsuits and debts, the Mostar Municipal Court declared that the complex should have been sold for BAM3 million.

  • Bosnia’s FDS Factory to Close Next Month

    Bosnia’s FDS Factory to Close Next Month

    Photo: Richard Darko

    Badeco Adria will close its Fabrika Duhana Sarajevo (FDS) tobacco factory due to financial losses, FDS said on Feb 14.

    In the past three years, losses have reached KM7.5 million ($4.3 million), FDS told SeeNews.

    The decision will be put to the vote at a Badeco Adria shareholders meeting in early March, after which the 200 employees at the factory will be laid off and will receive severance pay.

    Badeco Adria is the legal successor to FDS, which was established in 1880 as a tobacco company. After a restructuring process, the company changed its name to Badeco Adria in 2018. Badeco Adria is majority owned by Austria’s CID Adriatic Investments, which holds an 89.2 percent stake, according to the Sarajevo Stock Exchange.

    FDS plans to halt its operations on March 31, according to Faktor news agency.