ZAGREB, August 18, 2018 – Finance Minister Zdravko Marić said on Saturday a bill of amendments to the law on contributions was aimed at preventing abuse observed in recent years and that the changes did not apply to company board members and directors who were permanently employed and worked full time, and that there would be no changes for small and medium-sized enterprises.
Speaking to reporters, Marić said the abuse was evident in the fact that many board members and directors were reported as working for minimum wage and part time.
There are some 175,000 board members today, directors of various kinds of companies, and only 460 are reported as board members, yet they are not employed by the company in question, and about 65,000 are employed by the company, Marić said. The remaining 100,000 are board members and directors who have full pension and health insurance based on their employment in another business, he added.
Commenting on criticism that the bill was anti-enterprise, Marić reiterated what the incumbent government had done for entrepreneurs, including a profit tax cut from 20 to 18%, and 12% for SMEs. He also reiterated that the bill was drawn up to stimulate ICT engineers to stay in Croatia as well as attract international experts.
Under the bill, when a business owner pays a board member or employee a bonus in the form of profit sharing or equity, this kind of income will no longer be taxed as salary income but capital income, Marić said.
Commenting on criticism from the ruling coalition’s Croatian People’s Party (HNS) that it would not support a proposal to raise the base pay of company directors, Marić said he talked with HNS leaders yesterday and that they agreed it was necessary to define real enterprise in Croatia.
He said the government wanted to stimulate and facilitate real enterprise but that it must have zero tolerance of various forms of abuse committed under the guise of enterprise, such as non-payment of taxes and contributions. He reiterated that the bill did not go after board members reported as working full time. He said there would be no changes but those for the better for small and medium entrepreneurs reported as working full time only in their business.
Asked about a VAT cut on fresh meat and how to define fresh, Marić said, “The ‘fresh’ category will be defined precisely, what fresh meat’ means, fresh fish, as well as fruit and vegetables.”
Asked if the state would get involved in resolving the problems of the Uljanik shipyard, Marić said the state had a minority stake in the dock, yet that it was aware of its importance. He said the state was conducting a dialogue with the European Commission, from which the next steps are expected. As for unpaid salaries in Uljanik, he said the management and the company running Uljanik were responsible.
