In Sarajevo’s corridors of political power, the word “fiscalization” has become both a promise and a threat. For couple of years, the Government of the Federation of Bosnia and Herzegovina (FBiH) has talked about modernizing the way money moves, promising tighter oversight, higher revenues, and fairer competition. The centerpiece of this promise is the long-awaited Law on Fiscalization of Financial Transactions, which would finally bring electronic invoicing, e-Invoicing (b2b) and fiscalization (b2c) into the daily reality of the Federation’s businesses. Yet with parliamentary elections looming next year, and the fragile ruling coalition of the SDP and HDZ staring down voter fatigue, the clock may be running out on what many observers call the last chance to pass meaningful Bosnia e-invoicing system and wider fiscal reform.
Prime Minister Nermin Nikšić has made fiscal reform the cornerstone of his government’s program. He has said, more than once, that the Federation can no longer afford to leak public revenues while the grey economy flourishes in plain sight. For him and Finance Minister Toni Kraljević, the new system is meant to be the cure: an electronic net catching every invoice, every sale, every transaction. A central fiscalization platform, run by the Tax Authority, would monitor the data in real time, tightening control and curbing fraud. In theory, this is the missing piece that would stabilize the revenue side of the budget. Without it, the government risks pouring money into popular measures, such as raising the minimum wage to BAM 1,000, without securing the revenue base needed to finance them.
5 Key Takeaways
- A Last Chance at Reform: The Law on Fiscalization of Financial Transactions is seen as the Federation’s final window to modernize its tax system before elections and shifting political coalitions derail the effort.
- Offline Mode is Non-Negotiable: Without an offline fallback, fiscalization risks collapsing under patchy internet coverage, leaving dangerous loopholes for tax evasion and undermining the entire system.
- Politics Over Policy: Coalition fragility, entity-level tensions, and vested business interests complicate what should be a straightforward reform, turning technical fixes into political and covert business interests bargaining chips.
- Public Skepticism Runs Deep: Citizens and businesses, scarred by past scandals with fiscal devices, doubt whether this reform will deliver results or simply enrich suppliers at public expense.
- Bosnia Risks Falling Behind: Neighbors like Croatia, Serbia, and Montenegro already reap the benefits of modern fiscalization. Without decisive action, the Federation could be left with outdated systems, widening its economic and reputational gap.
Bosnia E-Invoicing: Complicated Political Arithmetic
The political arithmetic complicates everything. Bosnia and Herzegovina’s post-war constitutional setup, with two entities and multiple layers of government, already makes policymaking cumbersome. Even when one entity acts, it must keep an eye on what the other is doing. Employers’ associations in the Federation have repeatedly pointed out that the draft law was not aligned with the Republic of Srpska’s fiscal rules. Businesses trading across entity lines fear headaches, duplicate costs, and legal uncertainty. Some argue that the state should have addressed e-Invoicing by setting common rules for all, instead of allowing parallel systems to develop.
The government insists that the Federation cannot wait for a consensus that may never come. “If you fiscalize and your neighbor doesn’t, he undercuts you on price,” Kraljević told Oslobođenje. That is the core of the problem: honest businesses feel punished while those operating in the shadows pocket the difference. Markets, fairs, even the Sarajevo Film Festival, all are notorious examples where receipts are optional, if they appear at all. The result is a steady drain of public money, starved budgets, and demoralized taxpayers.
The Law Has Its Critics
But the law has opponents, and not all of them are in the grey economy. In the Parliament of FBiH, lawmakers like Mirza Batalović of NES have raised alarms about unintended consequences.The government could force traditional artisans, whose trade barely covers their living expenses, to buy fiscal cash registers, an expense that could wipe them out. “That would be the end of old crafts,” he warned, arguing for explicit exemptions to protect cultural heritage and low-profit trades. His amendment, already accepted in principle, shows how the political process dilutes even the best-intended reforms.
The proposed threshold of BAM 5,000 per year for mandatory fiscalization has provoked another storm. It would bring under the law not only businesses and sole proprietors, but also individuals earning modest sums from renting out an apartment or occasionally selling a car. Critics say this is absurd and unenforceable. How, for example, would the state prove that a citizen selling his old Volkswagen owes a fiscal receipt? Admir Čavalić of the SBiH party warns that poorly thought-out provisions like this risk turning a reform into a farce. Worse, they open the door to suspicion that private suppliers of fiscal devices and systems, who stand to earn millions, have shaped the rules in their own favor.
Suspicion Not Unfounded
That suspicion is not unfounded. The Federation has lived through two decades of scandals tied to fiscal cash registers, where select companies profited while compliance stayed patchy at best. Now the projected cost of introducing the new system hovers around BAM 100 million borne by the state. Supporters argue that the returns will be many times greater, bringing in billions of marks in tax revenues over the coming years. But skeptics see only another expensive project in a country where citizens have grown weary of costly reforms that never quite deliver.
Bosnia E-Invoicing: Why Offline Mode Matters
One of the most overlooked elements of the debate is the need for fiscal systems to function even when the internet does not. In many parts of the Federation, connectivity is patchy, unreliable, or easily disrupted. If fiscalization depends entirely on uninterrupted online access, every outage becomes a loophole for tax evasion. Businesses could claim “the system was down” while transactions go unrecorded.
Countries that have successfully introduced fiscalization have emphasized the importance of an offline fallback mode. In these systems, the technology cryptographically secures each transaction at the moment of sale, even without internet access, and later synchronizes it with the tax authority once the connection resumes. This system guarantees that it captures every invoice, whether or not the cash register is online at the time. Without such a safeguard, Bosnia risks repeating previous mistakes, an expensive system that looks modern on paper but leaves wide open doors for abuse in practice. Offline capability is simply the backbone that guarantees fiscalization works everywhere, all the time.
Government Comms Operate on a Low
The government’s communication has not helped. Employers complain that officials have not explained how the new system will work in practice, whether they accepted employers’ suggestions, or how they will handle cross-entity trade. Citizens worry that authorities will punish them if they fail to demand receipts, while businesses argue that the government should instead create positive incentives for consumers, such as lotteries rewarding those who scan and verify invoices. Without such carrots, compliance risks collapsing under the weight of cynicism.
For Nikšić, the political stakes are enormous. His SDP governs in coalition with the HDZ, holding power in the Federation for the first time in years. Their authority is fragile, with the Bosniak SDA waiting in the wings, eager to reclaim influence. If next year’s elections swing the balance, lawmakers may shelve the fiscal reform indefinitely. The SDA has resisted the current reforms that impose heavy upfront costs, and its critics suspect the party protects the grey economy networks that the new system seeks to dismantle.
This is why many insiders speak of a last chance saloon. If lawmakers pass the law this year, the reform gains momentum and becomes hard to reverse. If it stalls, the next government may quietly bury it, leaving Bosnia’s fiscal modernization half-finished yet again. The risk is not only financial but reputational: donors, international lenders, and foreign investors are watching. For them, Bosnia e-Invoicing goes far from mere receipts, it is a signal of political seriousness. Without it, the government’s promises of economic renewal ring hollow.
Bosnia E-Invoicing: Everyone Agrees on the Problem
The irony is that everyone agrees on the problem. Tax evasion drains the budget. The grey economy breeds unfairness. Honest businesses struggle to compete. Yet when it comes to solutions, political divisions, vested interests, and institutional complexity tear apart the consensus. One camp argues the law is too strict, another claims it is too lenient, and a third insists lawmakers must harmonize it with the Republic of Srpska. In the meantime, receipts remain non existent at open-air markets, and fiscal reform remains a talking point rather than a reality.
To outsiders, the resistance looks self-defeating. Other countries in the region, Croatia, Serbia, even tiny Montenegro, have already moved to online fiscalization, bringing measurable gains in tax collection. Bosnia risks falling behind as outdated rules tangle its businesses while neighbors modernize. Yet the Federation is not just another market; it is a fragile political entity, where every reform passes through multiple filters of ethnicity, coalition arithmetic, and entrenched business interests.
Is There a Political Will?
The coming weeks will test whether Nikšić’s government can turn political will into legal reality. The draft law has already survived public hearings and reached Parliament. Employers are waiting to see whether their input has been respected. Lawmakers are preparing amendments to shield artisans, raise thresholds, or carve out exceptions. Behind the scenes, lobbying is fierce, with technology providers competing for contracts worth millions.
If the government holds its line, and if Parliament swallows the political costs, the Federation could finally take a decisive step toward fiscal modernization. Bosnia e-Invoicing system would not only improve revenue collection but also send a message that the state is capable of imposing order in its economic affairs. But if compromises pile up, or if the debate drags on into the election season, the reform could unravel.
In that case, Bosnia’s citizens would have higher wages on paper, but the government would have no sustainable way to pay for them, leaving a growing budget hole and yet another chapter in the long story of unfinished reforms. The government would have gambled and lost, handing its opponents both a campaign issue and an opportunity to stall fiscal modernization for years.
For now, Sarajevo watches and waits. In the (no) smoke-filled committee rooms, where deals are made and unmade, the fate of fiscal reform hangs in the balance. The cash registers may not yet ring with electronic precision, but the political clock is ticking loudly.
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