Tax Revenues Growing More Slowly Than Budget Expenditures

Total Croatia News

ZAGREB, May 16, 2019 – Finance Minister Zdravko Marić said on Thursday that tax revenues had increased by 3.3% in the first quarter of the year while budget expenditures increased by about 6%, noting that the somewhat higher rate of expenditures compared to revenues was usual for that time of the year.

Addressing a press conference, Marić said that revenue from VAT and profit tax increased by 3.3% while excise taxes increased somewhat “more strongly.” He underscored that he was particularly pleased with contributions for pension insurance, which recorded an increase in revenue of over 5%.

When it comes to expenditures, it increased by about 6%, with Marić noting that the January-March period is always “the worst” in the budget sense.

Responding to reporters’ question as to whether VAT would be decreased from 25% to 24%, Marić recalled that that has been regulated by law and will enter into force as of 1 January 2020. “We included that in the law and it was passed in parliament for VAT to be reduced from 25% to 24% as of 1 January 2020,” he said.

Marić would not comment on an idea by former central bank governor Željko Rohatinski, who said that the Uljanik shipbuilding company could be salvaged by printing money, but said that that was a question for the central bank.

Thursday’s issue of the Novi List daily ran an interview with Rohatinski who said that “we can conduct an active monetary policy and salvage shipbuilding, despite being told that signals from abroad say that isn’t possible.”

The article also notes the reaction of the bank’s incumbent governor, Boris Vujčić, who said that it would be best for Rohatinski to explain just how he would achieve that, as well as noting that Croatia currently has a surplus liquidity of 36 billion kuna.

More budget news can be found in the Business section.


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