The indirect taxation authority of Bosnia and Herzegovina announced on November 3 that total indirect tax revenue for the January‑October period of 2026 grew by 6.1% compared with the same period last year, reaching 10.7 billion convertible marks (KM). In euro terms, using the official conversion rate of 1 € = 1.956 KM, the amount equals roughly €5.5 billion.

After accounting for value‑added tax (VAT) refunds, net revenue from indirect taxes stood at 8.9 billion KM, marking a 7.5% year‑on‑year increase. The authority said the net proceeds were allocated among the state‑level government, the two constituent entities – the Federation of Bosnia and Herzegovina and the Republika Srpska – and the Brčko District, though the exact distribution percentages were not disclosed.

In addition to standard indirect taxes, special toll revenues earmarked for the construction and reconstruction of motorways and roads were allocated to the entities. The Federation received 206 million KM, the Republika Srpska obtained 136 million KM, and the Brčko District was allocated 7 million KM for this purpose.

The upward trend in indirect tax collections suggests a strengthening of the domestic fiscal base despite lingering economic challenges in the Western Balkans. Analysts note that the growth is partly driven by higher consumption levels and improved compliance with VAT regulations, which were reinforced by recent administrative reforms.

The authority’s statement did not specify which categories of indirect taxes contributed most to the rise, but indirect taxes in Bosnia and Herzegovina typically include VAT, excise duties on fuel, tobacco, and alcohol, as well as customs duties. The increase in net revenue after VAT refunds indicates that the refund mechanism is operating efficiently, returning a smaller proportion of collected VAT to taxpayers than in the previous year.

The additional toll revenues highlight the continued emphasis on upgrading the country’s transport infrastructure. Funding from these sources is intended to support ongoing motorway projects that aim to improve connectivity both within Bosnia and Herzegovina and with neighboring markets.

Overall, the 2026 figures underscore a modest but positive fiscal development. The authority plans to publish a full breakdown of the revenue distribution later in the year, which will provide clearer insight into how the increased collections are supporting public services across the state, the Federation, Republika Srpska, and Brčko District.

Sources (learn more):

seenews.com — https://seenews.com/news/bosnias-indirect-tax-revenue-up-6-percent-yy-in-jan-oct-1304188