Bosnia and Herzegovina's Fragmented General Forest Functions Fee

Both entities of Bosnia and Herzegovina levy a compensation charge on commercial timber harvesting to fund the "general beneficial functions" of forests — erosion control, water regulation, biodiversity and recreation — a concept inherited from former Yugoslav forestry law and mirrored in similar levies in Croatia and Serbia.

Republika Srpska applies a single, entity-wide rate of 10% of revenue from timber sold at the forest-road price (a base that already includes extraction and transport costs), collected uniformly across all municipalities under a standardised calculation, collection and distribution method. This yielded 48.4 million convertible marks (KM) in 2023.

The Federation of BiH has had no unified forestry law since 2009, forcing each of its ten cantons to set its own rate on the (typically lower) stump-price base: for example 9% in Una-Sana Canton (2% to the canton, 7% to the municipality) versus 4% in Central Bosnia Canton (1% to the canton, 3% to municipalities). Despite comparable logging volumes, the Federation collected only 15.8 million KM in 2023 — under a third of Republika Srpska's total — a gap investigative reporting attributes to the lack of a harmonised legal framework and canton-by-canton administrative fragmentation.

No public ex-post evaluation was found quantifying the ecological outcomes (afforestation, erosion control, biodiversity gains) actually delivered by either entity's fee revenue: the well-documented fact is the fee collected, not the ecosystem service produced. The Federation's shortfall is an honest illustration of a governance risk common to decentralised, PES-like levies — fragmentation can erode both the revenue and the accountability needed to fund forest ecosystem services at scale.

Read the full analysis: https://www.klix.ba/biznis/privreda/ista-suma-tri-puta-manje-para-zasto-fbih-gubi-novac-koji-rs-uredno-naplacuje/251217058