Republic of Srpska proposes VAT on electric vehicles to be scrapped

In order to reduce air pollution from traffic, the Ministry of Energy and Mining of the Republic of Srpska has proposed the abolition of the value-added tax on the import of electric vehicles.

The Ministry of Energy and Mining of the Republic Srpska sent an initiative to the Indirect Taxation Authority of Bosnia and Herzegovina to amend the Law on Value Added Tax in the part related to the taxation of new motor vehicles and proposed the introduction of VAT exemption on imports of electric vehicles (EV).

The Republic of Srpska is one of the two entities of the BiH. VAT on vehicle imports is 17%.

With the new Law on Electricity, RS has introduced the activity of charging electric vehicles

According to the ministry, the proposition is part of the activities on the implementation of the Law on Electricity. The Republic of Srpska was the first in BiH to define the use of electric vehicles. The law has introduced the service for charging electric vehicles and defined the minimum technical requirements for chargers.

So far, about 30 charging stations have been put into operation in BiH, and currently the number of electric vehicles is small and there are no incentives for their purchase and use.

An initiative similar to the one launched by Srpska’s Ministry of Mining and Energy was launched at the beginning of 2019 by the Ministry of Foreign Trade and Economic Relations of BiH, which proposed the abolition of import duties on electric vehicles. However, the 5% levy remained.

Đokić: I expect the proposal to be accepted

Mining and Energy Minister Petar Đokić said the developed countries of Western Europe are strongly promoting the use of electricity in the transport sector in order to reduce emissions and protect the environment. Among the measures to promote EVs, they have introduced different types of tax exemptions and other incentives.

RS wants to give its contribution because a significant increase in the number of electric vehicles cannot be expected if incentive measures are not introduced, said Đokić, adding that he expects the proposal to abolish VAT to be accepted.

He asserted such measures are necessary due to BiH’s international obligations regarding the reduction of emissions and for a responsible stance towards the health of the population and the environment.