May the 9th, 2023 – Croatian wages are set to increase for a significant proportion of the population thanks to recently introduced government measures, but it won’t be the case for everyone.
As Poslovni Dnevnik writes, neither the complete abolition of surtaxes, nor the increase of the non-taxable part of Croatian wages, nor the reduction of income tax rates will raise the salaries of about two-thirds of taxpayers from next year on, because even with the current rules, those individuals don’t pay those particular taxes, as Novi list reports.
Only those people with a net salary of at least 800 euros per month or even those who earn more than the average net salary stand to actually benefit financially from this latest government move aimed at increasing Croatian wages. This is the main reason why the government is seriously considering reducing pension contributions in the first place in order to raise the figure those who earn lower salaries take home each month.
That said, after the abolition of surtaxes, Croatian wages would not increase even for those with above-average incomes, because many of them live in cities and municipalities that have not introduced or abolished the surtaxes and so they’ll keep on having to pay local levies.
Where surtaxes aren’t already being paid, its cancellation from January the 1st will not actually bring anyone a higher salary, and it’s highly unlikely that those cities and municipalities will take advantage of the opportunity to further reduce income tax rates, because they already tried to relieve the burden on their residents by deciding to waive the need to pay surtaxes previously.
Just many workers will actually be left without a salary increase from January the 1st due to these circumstances, although the government keeps on claiming that salaries will increase for everyone, is currently unknown. All we do know is that facts will need to be faced at some point or another, as the Croatian Government is expected to come out with this data when it presents its proposal for tax changes.
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