MOST Proposes Measures to Increase GDP Growth

The goal is to achieve economic growth of almost four percent by 2020.

Unemployment and young people leaving the country are two key problems facing Croatia, claims MOST in its economic manifesto that will most likely be presented on Tuesday, reports Večernji List on August 15, 2016.

MOST plans to establish a national agency for fight against unemployment and launch comprehensive public works funded by the EU. The aim is to reduce the youth unemployment rate by seven percent. Furthermore, they suggest that the corporate tax rate should be decreased from 20 to 17 percent. The VAT rate should not be changed in the next four years, but a non-taxable part of income would be increased by 100 kuna per year during the next four years. The exchange rate stability should continue to be a priority, but the Croatian National Bank should react more decisively when kuna appreciates. All these measures should bring about GDP growth of 3.88 percent by 2020.

In addition to lower corporate taxes, MOST proposes the abolition of taxes on dividends and shares in profits. MOST has also prepared a special programme for the development of entrepreneurship. They also consider it necessary to establish a single place at which entrepreneurs would be able to get information about all the regulations.

At the beginning of next year, they would introduce loans for growth and development in cooperation with the Croatian Bank for Reconstruction and Development. The aim is to facilitate access to capital for small and medium businesses through lower borrowing costs and reduced requirements. The loans would be offered in the amount of up to three million kuna. MOST would also review the issue of compulsory membership of companies in the Croatian Chamber of Economy.

Youth employment, particularly for those who have higher education, would be stimulated by freeing the companies that employ such people of obligation to pay a part of the corporate tax. As for citizens’ debts, the solution would be sought in agreement with the banks, according to the principle of the division of burden between citizens, government and banks.

 

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