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Confirmed Indictment For “Envelope Salaries”

Prosecutors accused Tuzla businessmen of evading approximately BAM 190,000 in taxes by paying employees cash in “envelopes”, an issue CIN reported on last year.
CIN journalists filmed workers outside Zlata Avdagić’s office coming to collect envelopes with money. (Photo: CIN)

The Municipal Court in Tuzla has confirmed the indictment against Abdullah Avdagić, his wife Zlata Avdagić, their companies RIVA and Robni terminal, along with several employees of these companies, on suspicion of tax evasion. The Canton Prosecutor’s Office in Tuzla alleges that between June 2021 and November 2022, they evaded approximately BAM 190,000 in taxes by paying employees cash in envelopes.

The Center for Investigative Reporting (CIN) reported in mid-2023 that the Avdagićs have been paying cash in envelopes to workers for years.

Workers Trapped In A Vicious Circle of Blue Envelopes
Businessman Abdulah Avdagić from Tuzla has been paying employees cash in envelopes for years. The employees claim it is the salary to which no taxes have been paid, the employer claims it is a gift, while the Prosecutor’s Office is investigating allegations of tax evasion.

Reporters interviewed nine employees of the Avdagić family, who revealed that they had been receiving a portion of their salary in cash and another portion deposited into their bank accounts for several years. The monthly pay slips of RIVA and Robni Terminal employees, which were shared with the reporters, contained the following sections: ‘agreed salary’, ‘payment via bank’, and ‘envelope’. The amounts paid through the bank and in cash via envelope add up to the agreed salary.

Yet, Damir Alagić, the lawyer representing the Avdagić family, asserted during the interview that his clients were not disbursing salaries in envelopes but were providing gifts that were not taxable.

“Millionaires who are paying minimum wage to people – giving a gift each month, it’s ridiculous. That’s not a gift, it’s a salary in an envelope,” remarked Emir Baraković, a former RIVA employee, to reporters at the time.

Investigation Into “Salary Paid In An Envelope”
Prosecutors investigate Tuzla entrepreneurs for off-the-books salary payments amid suspected tax evasion, as previously reported by CIN.

Abdulah Avdagić’s business activities have been the subject of investigation by authorities before. In the early 2000s, the Customs Administration of the Federation of Bosnia and Herzegovina reported him three times to the Cantonal Prosecutor’s Office of the Una-Sana Canton (USC) while he served as the director of “Riva Komerc” for smuggling Ronhill and Boss cigarettes brands during the post-war years.

During the investigation, Avdagić denied involvement in smuggling and claimed not to know the drivers transporting the cigarettes, despite documents indicating his company as the importer. After seven years, the USC Prosecutor’s Office discontinued the investigation against Avdagić due to a lack of evidence.

Since 2008, the company Robni terminal has been leasing parking spaces and offices to the Indirect Taxation Authority of Bosnia and Herzegovina for the customs terminal. According to ITA BiH data, from 2010 to 2020, the company earned 8.5 million BAM from leasing this space.

The Avdagić family – Abdulah, Zlata, and their daughter Amila – are owners and managers of several companies in Bosnia and Herzegovina and Croatia involved in transportation, distribution, wholesale, retail, and real estate rental. They also operate dozens of kiosks throughout Bosnia and Herzegovina.

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