The Lipa Association gives a mixed assessment of the government’s reform plans.
The Association of Taxpayers “Lipa” supports the fact that the government decided to use the National Reform Programme to tackle the problem of public debt, but also believes that the program is not sufficiently ambitious and that it ignores some of the pressing problems, such as tax policy, corruption and conflict of interest in the judiciary, announced the Association on Monday, reports tportal.hr on May 2, 2016.
Lipa said that National Reform Programme was a continuation of the annual cycle of harmonization with the EU economic policies. “We commend the fact that this programme tackles the problem of public debt, which is something that the Association has insisted since its establishment. However, we believe that the government has not addressed some of the pressing problems of the country. Furthermore, we believe that the Programme paves the way for further deterioration of the public health system”, said the Association in a statement.
The Taxpayers’ Association added that it did not support the announced introduction of property taxes because such a move was contrary to pre-election announcements.
On the other hand, it supports the announced deficit reduction and consolidation of public debt, as well as reduction in administrative and fiscal burden for businesses, since these are the fundamental prerequisites for economic growth. The Association also supports public administration reform, curricular reform and liberalization of the services market, in line with the EU rules.
They point out that reforms do not contain measures to combat corruption in the judiciary, which became a part of the problem, instead of being a part of the solution. They add that the latest events indicate that the rule of law was threatened in Croatia.
“It is worrying that the government, according to the Convergence Programme, has accepted the ongoing structural deficit of the budget until the end of this decade, while at the same time it has not indicated the possibility for reducing the tax burden”, said the Association in a statement.
It added that income taxes and capital gains taxes were stifling businesses and capital markets, and that the extreme progressivity of the income tax, with the highest rate of 40 percent being applied to medium incomes, is chasing away technology companies, highly qualified employees and top managers, who should be an engine of development.
“We urge the government to remedy these deficiencies as soon as possible and announce a specific plan of tax reforms that will ensure the acceleration of technological and economic development of Croatia”, the statement reads. “We will continue to strongly support the necessary structural reforms, and the government should be more consistent and braver in the future.”
