Lawmakers Push to End VAT Exemption for Gambling in Bosnia and Herzegovina
Lawmakers from Our Party have tabled a bill to remove the state VAT exemption on gambling and divert revenue to health and social services.
LISTEN TO THIS ARTICLE:Members of the social-liberal, multi-ethnic Our Party – House representatives Mia Karamehić Abazović and Amir Purić – have formally proposed amending gambling legislation in Bosnia and Herzegovina to eliminate the current value-added tax exemption for gambling operators. The sponsors say the change is intended to create a more equitable tax regime and to channel new income into cancer care, treatment for rare illnesses, programmes for compulsive behaviour and critical medical equipment.
The proposal arrives against the backdrop of an industry that, according to the authors, generates roughly KM 1.8 billion in annual revenue while the Federation of Bosnia and Herzegovina currently collects under KM 35 million a year in taxes from gambling. "Today, gambling is the only legal activity that creates addiction but is not taxed at the state level", Abazović told local media. "Alcohol and tobacco products are subject to both excise taxes and VAT precisely because of the harmful consequences for citizens’ health."
Purić framed the measure as a simple question of tax fairness and fiscal responsibility. "This is a matter of elementary fiscal fairness", he said, citing the disparity between sector revenues and state receipts. He added that the proposed amendments would increase annual transfers to the Federation to at least KM 150 million and generate a further KM 50 million for municipalities and other local communities.
Under the draft amendments, additional funds raised by removing the VAT exemption would be ring-fenced for specified public priorities: oncology services, specialised care for rare and serious conditions, addiction treatment and prevention, and investment in medical diagnostic and treatment equipment. Backers also envisage proceeds supporting science, culture, sport and entrepreneurship initiatives at the local level.
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Funding Allocation and Political Roadmap
While the sponsors present clear spending priorities, the legislative path remains uncertain. The bill was introduced in the state-level parliamentary chamber and must now proceed through committee review and debate before any vote. Bosnia and Herzegovina’s layered governance model – with state institutions and two entities, the Federation and Republika Srpska – adds complexity to tax and regulatory reforms, particularly where revenue-sharing and administrative competence are involved.
This is not the first attempt to reshape gambling taxation. In November, Democratic Front representative Dennis Gratz proposed a reallocation model that would have split gambling tax revenue – 60 percent to the treasury, 20 percent to social initiatives and 20 percent to specialised healthcare – but that effort did not advance. Industry groups are likely to push back on new levies, arguing that higher taxes will drive activity underground or to neighbouring markets. Public health advocates, by contrast, have welcomed proposals that treat gambling as a regulated activity carrying social costs similar to alcohol and tobacco.
How the measure will affect operators, consumer prices and the overall gambling market depends on the final tax design: whether VAT would apply to gross gaming revenue or to operator margins, and how collection and compliance would be enforced across entities. Legal advisers and tax specialists say those technical details – and transitional arrangements for existing licences – will be decisive in determining both revenue yield and industry reaction.
Voices Supporting the Proposal
Supporters argue the move would correct a long-standing anomaly in Bosnia and Herzegovina’s tax code and provide a predictable funding stream for health and social services. Abazović said the current tax treatment is unequal compared with basic goods and services, and called for swift action. "Gambling should not enjoy more favourable tax treatment than food, medicine and books", she said.
Purić outlined the expected fiscal impact in detail: "The Federation of Bosnia and Herzegovina currently collects less than KM 35 million annually from an industry that generates KM 1.8 billion in revenue. The proposed Gambling Act amendments would increase that amount to at least KM 150 million a year for the Federation and an additional KM 50 million for local communities."
As the bill advances, stakeholders from government, the gambling sector, public health organisations and municipal authorities will press for clarity on allocation rules, implementation timetables and safeguards to prevent regressive impacts on vulnerable groups. Lawmakers have signalled a willingness to move quickly this year, but the outcome will depend on committee reviews, cross-entity negotiations and political calculations ahead of the next parliamentary session.
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