Croats who live along the border with Bosnia and Herzegovina often go across the border to do their regular grocery shopping in the neighbouring country. The reason is simple and obvious – prices in Bosnia and Herzegovina are much lower. In addition to fuel, many other items are also much cheaper there, reports dnevnik.hr on January 11, 2017.
Mirko Martinović from Vinkovci comes to Orašje in Bosnia twice a month to do his grocery shopping. “I am not sure about all the items, but I can remember about 50 to 70 items, so I know their prices and I buy them here.” Fruit, juices, dairy products, spices, beer.... the full basket. And he has some money left in his wallet. “By coming here I save about 100 to 150 kuna. So, twice a month, it comes to 300 kuna. It is not much, but still comes in handy”, he said.
One of the reasons for lower prices in Bosnia is lower rate of the value-added tax. In Bosnia and Herzegovina, the VAT rate is 17 percent, while in Croatia it is 25 percent. And that is not all – Croatian citizens are also entitled to a VAT refund if they do their shopping in Bosnia.
Gabrijela Vincetić, who works for a shopping centre, explained the rules. “They must buy goods worth at least 100 Bosnian marks (about 50 euros) and then they come to us and we calculate their VAT refund. They then take the document, which consists of four pages, go to a border crossing where they receive a certificate that they have left the country, and then they have three months to return to Bosnia in order to pick up their refund.”
However, there is no tax refunds for cigarettes. Still, despite that, they are still significantly cheaper than in Croatia. “In Croatia we have to pay 25 kuna, and here they cost 18.5 kuna”, said Željko Rajković from Županja. People are allowed to take 20 packages of cigarettes across the border, and on average they save about 65 kuna. They can also save on the fuel, on average about 1.60 kuna per litre. For an average fuel tank of 50 litres, Croatian citizens save about 80 kuna.
The main reason for cheaper fuel in Bosnia and Herzegovina are lower state levies. Excise duty on a litre of fuel in Bosnia is 2.60 kuna, while in Croatia it is 3.86 kuna, so it is no wonder that Croats from border areas are spending their wages in Bosnia.