Croatian Government Measures Must Protect Blossoming Croatian IT Sector

Lauren Simmonds

As Vedran Marjanovic/Novac writes on the 1st of April, 2020, although not as directly threatened by the spread of coronavirus as the tourism, hospitality and trade sectors are, the Croatian IT sector is already slowly feeling the effects of the coronavirus impact on the economy, with widespread concern about how long the crisis will last and what its consequences will be.

”Due to the significant percentage of drop in orders and cancellations of already ordered jobs, there’s a challenge with the workforce, and the number of cancelled projects is worrying because the inflow of new revenues can no longer be predicted and existing receivables are more difficult to pay off due to a kind of panic in the market,” stated Ivan Ante Nikolic, a member of the executive board of the Association of Information and Communication Activities of the Croatian Employers’ Association and the president of the board of Blink.

For understanding the position of the Croatian IT sector on the overall market, warned Nikolic, it is important that IT companies cooperate with different sectors of the economy, which has made and will continue to make them less exposed to disruption in certain parts of the economy.

”The impact on companies in the Croatian IT sector depends on the decline in activities in the sectors our clients work in. As expected, the biggest concern is with companies whose clients are in the tourism and hospitality, transportation, logistics, construction and other sectors which are more exposed to the effects of coronavirus,” he noted.

On the other hand, companies in the Croatian IT sector which operate with banks, telecommunications or pharmaceutical companies, show less concern about the current situation, but, as Nikolic pointed out, everyone is fully aware of the uncertainty that the epidemic is bringing to their long-term business plans and the damage it might ultimately cause.

Commenting on the government’s 63 measures to help the economy overcome the effects of the coronavirus, Nikolic proceeded to urge the Croatian Government not to forget about the Croatian IT sector, while it isn’t exposed to the coronavirus crisis like other sectors are, the government must not forget to identify further ways of helping out businesses in the field.

”Emergency loans to preserve liquidity should be defended by all forces in these situations so as not to create side effects. We hope that these loans will not be much more generous than the HAMAG BICRO loan in the amount of 25 thousand euros,” Nikolic said.

Companies in the Croatian IT sector assembled at the Croatian Employers’ Association (HUP) to support a general request to exempt businesses from needing to pay income tax, contributions and surtax for a minimum of three months, as well as to abolish corporate tax advance payments and provide a moratorium on repayment loans and leases for twelve months.

They also want to hear the government’s ideas for what will happen in the aftermath of the coronavirus pandemic. For them, as they pointed out, the direction is clear and requires an unprecedented investment boom that would launch investments and alleviate the negative effects in the wake of the coronavirus epidemic.

”Investments must and can be initiated through multiple courses of action. The government must establish a faster and more efficient system for EU funds so that the real sector can reach investment funds more quickly,” Nikolic said, noting that private investment funds will also be needed to put the Croatian economy back on its feet after the coronavirus pandemic passes.

Make sure to follow our business page for more. For rolling information and updates in English on coronavirus in Croatia, follow our dedicated section.


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