Bosnian government resigns

2004-11-05 17:34

Sarajevo - Bosnian Prime Minister Adnan Terzic and his government on Friday offered to step down after losing a vote on a key tax reform, but it was unclear whether the country's presidency would accept the resignation.

"Terzic's letter offering the resignation of the entire government was delivered to the Bosnian presidency on Friday morning," said his chief of staff Mirsada Bukaric, but she stressed Bosnia's tripartite presidency "may reject or accept the resignation".

Drago Vukovic, an aide to the presidency, composed of a Croat, Muslim and a Serb member, said the presidency is to discuss the matter on Monday.

Terzic warned on Thursday he would resign after the parliament, in which the government parties hold a majority, refused to back a key reform introducing a uniform value added tax (VAT) that is designed to bring country closer to European Union standards.

Authorities here have already agreed to reform and unify the tax system following pressure from the international community's powerful representative in Bosnia, Paddy Asdhown.

Bosnia currently has separate sales tax systems for each of its post-war entitites - Serb's Republika Srpska and the Muslim-Croat federation.

The government backed a single 17% VAT with exceptions only for public services and educational equipment and materials.

However lawmakers adopted amendments putting basic food products, among them bread, milk and cooking oil, as well as newspapers and printing services in the zero-tax category.

Terzic argued such a large number of exemptions would open the door for corruption.

The upper house still has to adopt the law before it comes into effect.

'A trick masterminded by the international community'

Ashdown's office supported Terzic's move expressing hope that the reform process would not be halted in an implicit call on upper house lawmakers to reject the law.

"The prime minister is to be applauded for his principled stand in support of a key reform," a statement from Ashdown's office said.

"We hope that the prime minister and parliamentary colleagues will now consider how to proceed in a way which prevents disruption or delay at this crucial stage in Bosnia's reform process," it said adding that Terzic is entitled to "introduce more discipline to the governing coalition.

The parties which make up the government also hold a majority in the parliament.

Analyst Senka Kurtovic fircely criticised Terzic, saying he was not serious about his intention to resign.

"Terzic is bluffing. It's just a trick masterminded by the international community and him in order to put pressure on the upper house to reject the law," she said, adding she expected the presidency to reject his resignation.

"When a prime minister announces his resignation he does not leave the country a few minutes later," she added.

- AFP