This article examines policy switching between Slovenia and the Federation of Bosnia and Herzegovina (FBH). The idea behind it is that national microsimulation models can be used to apply Slovenian parameters to the FBH data, as established by the Personal Income Tax (PIT) Act and Social Security Contributions (SSC) Act. Accordingly, we introduce FBH parameters to Slovenian data. Along these lines, we investigate the effects on public finance systems with respect to revenues from PIT and SSC, average after-tax income, tax progressivity, income inequality, and the redistributive effect in each of these two countries, using the other country's PIT and SSC solutions. This is the first fiscal comparison of Slovenia and the FBH, as well as the first policy switching analysis of the two countries.

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