ZAGREB, August 3 2018 – The Croatian Employers’ Association (HUP) supported on Friday the government’s efforts to reduce the tax burden on employers, but emphasised there was still room for more significant tax breaks, particularly with regard to costs of doing business and overall costs of labour.
“HUP welcomes the government’s effort to reduce the tax burden on employers and citizens, and after seeing the initial proposals, we consider that there is still more room for significant cuts of costs for employers considering the current situation on the labour market and the need to improve the competitiveness of the economy as a whole,” HUP said in a press release.
In the coming period, through dialogue with the government and other social partners, HUP will seek additional measures to relieve the economy, and in particular the cost of doing business and overall costs of labour.
At the same time, HUP will carefully watch out for announcements of additionally increasing contributions and surcharges. “Through social dialogue, we will demand a clear plan of spending of new funds and the use of current funds in the best possible way. We expect a clear implementation of the reform plan in each department and strong arguments for the introduction of additional surcharges,” HUP said in the press release.
Prime Minister Andrej Plenković and Finance Minister Zdravko Marić on Thursday presented news concerning Value Added Tax (VAT), income tax and contributions, underscoring that the planned changes would result in a relief of 2.7 billion kuna.
The planned changes propose that the wage contribution of 0.5% for safety at work and the 1.7% contribution for employment be rescinded and the contribution for health insurance increase from 15 to 16.5%.
In addition, VAT on fresh meat, fish, fruit, vegetables and nappies would be reduced from 25 to 13% as of 2019.
Income taxes too would be amended so that the 36% tax rate would be applied to incomes of over 30,000 kuna and not 17,500 kuna as is the case now.
The real estate tax would be reduced from 4 to 3%.
