The Chairman of the Council of Ministers, Adnan Terzic, said at a press conference in Sarajevo on Tuesday that all preparations for the introduction of VAT had been successfully completed as part of tax reform and that the move was not expected to cause any disruptions on the market or skyrocketing prices.
"This is a radical and risky step, but a necessary one to put Bosnia-Herzegovina on the same level with other countries in the region and Europe," Terzic said.
The Value Added Tax Act, passed more than a year ago after months of preparations, does not provide for any exemptions from taxation.
Opposition parties and trade unions have severely criticised the government for the move, saying that it was partly made under international pressure due to the estimate that several tax rates would only encourage tax fraud.