Lower excise taxes and free stone are against the law and the EU

The reduction of excise duty on fuel for the contractor and subcontractors who built the first section of the Smokovac - Mateševo ​​highway was contrary to European Union directives. The exemption of contractors and subcontractors from paying concession fees for stone used on the highway route was contrary to the Concessions Law and the Mining Law.

This is stated in the proposed amendments to the Law on Excise Duties and the Law on the Bar - Boljare Highway, which are in the parliamentary procedure.

According to data from 2021, which did not represent a final calculation, ten million euros were returned to contractors and subcontractors in the form of fuel excise tax refunds, while the value of construction stone taken from the highway route (7,7 million cubic meters) was 50 million euros, for which no compensation was paid.

The new section from Mateševo ​​to Andrijevica will be built by a consortium of three Chinese companies: PowerChina Ltd. - Stecol - PCCD, for 694 million euros.

At the end of April, the government submitted a proposal for amendments to the Law on the Bar - Boljare Highway to the parliamentary procedure, which deletes the previous provisions exempting the contractor and its subcontractors from paying value added tax, income tax and contributions for foreign workers, profit tax, as well as customs duties on the import of materials used during construction.

"Vijesti" then published an article stating that the fuel excise tax refund remains valid for the contractor and subcontractors, because this privilege was not in the Highway Law but in the Excise Law, and that these amendments to the Highway Law do not include Articles 14 and 15, which refer to the free use of construction stone that the contractor and subcontractors excavate on the highway route.

Two days later, a Europe Now MP Tonći Janović submitted to the parliamentary procedure a proposal for amendments to the Law on Excise Duties, which provides for the deletion of parts of two articles relating to the right to refund and the amount of excise duties for fuel and gas oils used by the contractor and subcontractors during the construction of the highway.

"The reasons for the change are the termination of the contract - the special reduced excise duty regime was related exclusively to the first contract for the construction of the Bar - Boljari highway. As that contract is no longer in force, there is no legal basis for the continued application of the relief. The EU excise duty directives clearly stipulate which activities can be exempted or have the right to a refund of excise duty (e.g. energy sources for electricity production, for chemical processes, for air and maritime transport). Projects such as the highway are not envisaged as an exception," the explanation of the changes states.

It was pointed out that retaining the norm on excise duty refund benefits would create legal uncertainty.

"The deletion of these provisions ensures equal treatment of all excise taxpayers, without privileges related to individual projects. The removal of the reduced excise duty increases budget revenues and contributes to fiscal discipline. The proposed amendments aim to make the Excise Law consistent and fair," the explanation states.

The previous version of the law stipulated that the subcontractor had the right to a refund of 25,9 cents per liter of fuel, and the contractor 16,9 cents per liter of fuel.

In the proposed amendments to the Highway Law, in the Government's amendment to the law, Articles 14 and 15 remained, which refer to the free use of construction stone that the contractor and subcontractors excavate on the highway route. In other words, they are exempt from paying a concession for the excavated stone.

After the article in "Vijesti" the deputies of the Bosniak Party Amer Smailovic i Mirsad Nurković They submitted an amendment to the Parliament deleting Articles 14 and 15 from the law, with the explanation that building stone can only be used in accordance with the laws on concession and mining and with a paid concession fee.

During the construction of the first section, it was controversial that there were no clear mechanisms to control how the stone was used, whether its costs were charged to the state through invoices for the works, and that there were no controls to ensure that the contractor and subcontractors could use it on their other construction sites.