Ministry proposes temporary cut in import duty on new cars, zero duty on electric cars

The Ministry of Foreign Trade and Economic Relations of Bosnia and Herzegovina (BiH) has proposed lowering the import duty on new conventional cars and scrapping the levy entirely on electric cars through to the end of 2019.

The proposed decision to temporarily suspend and lower import duties on new cars through to December 31, 2019 is aimed at lowering taxation and improving the regulatory framework for imports of new cars, especially electric cars, the ministry said, Klix.ba reported.

Minister Mirko Šarović called for a public consultation on the proposed decision so that experts and the broader public can contribute to producing the best possible regulation and so that BiH can respond as efficiently as possible to fast-paced changes on the global market, where the sale of electric cars doubles every year.

“The [proposed] decision on the temporary suspension and temporary reduction of customs duties on imported new cars envisages lowering the customs duty from 15% to 5% on new gasoline- and diesel-engine cars and hybrid vehicles that do not enjoy a preferential status of goods from countries with which Bosnia and Herzegovina has free trade agreements, and from 5% to 0% on electric cars,” the ministry said.

Around 1 million electric cars are sold annually in the world, while the latest data shows that BiH has only 18 registered electric cars.

The more favorable duties will stimulate imports of new cars, which will mean multiple benefits, both in terms of reduced air pollution and environmental protection and in terms of improving traffic safety, the ministry said.

Šarović met with representatives of the Federation of BiH (FBiH) Chamber of Commerce in June 2018 to discuss an initiative to reduce taxation and improve the regulatory framework for imports of new and electric cars.

The ministry said at the time that creating conditions for imports of electric cars is important in order to increase the use of renewable energy sources and fight pollution.

BiH holds the first place in Europe by premature mortality due to air pollution, and it is estimated that 30% of pollution originates from vehicles’ exhaust emissions, the ministry said.

Air quality measurements by the US Embassy in BiH showed Sarajevo to be the world’s most polluted city for a number of days in late 2018, with PM 2.5 levels that are deemed “hazardous.”