Good News for Entrepreneurs, Croatian Government to Reduce Parafiscal Levies

Total Croatia News

But if he fails to deliver, Croatia stands to lose 10 billion kunas a year, entrepreneurs warn the PM.

During the meet and greet session at the Croatian Chamber of Economy on March 17, 2016, Croatian Prime minister talked about all the reforms his cabinet will implement now that the budget issue is out of the way. One that definitely caught the attention of all businessmen that were present at the meeting was his announcement that the Government will lower the parafiscal levies by 0,1% of the GDP or by 330 million kunas.

“I come from the business sector so I know what kind of obstacles entrepreneurs and investors face in Croatia. So, along with the lowering of parafiscal levies, we will also introduce changes to the judiciary system in order to harmonise court practices and to shorten court proceedings, we will speed up the construction permit process by clearing the mess in the land registries and cadastral offices and we will also form a fund for small and medium businesses with 500 million euros”

Most entrepreneurs have faced the above-mentioned problems and they stressed that our tax policy, legal uncertainty and an enormous number of non-tax levies, public administration and judiciary system are the biggest hurdles in their day to day operations.

Mladen Fogec – President of Association of Foreign Investors

 Malden Fogec, president of the Association of Foreign Investors confirmed that investors also face the same problems and named our tax policy and legal uncertainty as the biggest ones. However, he also mentioned problems that relate to local administration because they often don’t follow Government policies. Croatian Chamber of Economy already conducted a few actions to remove some of the obstacles such as the resolution of legal disputes in three months time with the arbitration of HGK and Chamber will increase the number of its offices abroad in cooperation with the Ministry of Foreign Affairs. The new office will open in Shanghai in June and representatives will return to their former offices in Sarajevo and Belgrade. surveyed some of the entrepreneurs that were present at the meeting and their opinions vary. Some of them have a very positive opinion, like the President of the Board of Span, Croatia’s largest software exporter and the president of the IT section of the Croatian Chamber of Economy: “Prime minister spoke to us as a person from the industry who is very well aware of the current state of our economy and he was not hiding the fact that the proposed budget is not showing any signs of reform. If nothing else, just the idea of reducing the parafiscal levies is a step in the right direction” Dujmović said stating that the IT industry is waiting for the day when they will no longer have to pay a fee to the Croatian Chamber of Economy.

Petar Lovrić from the Croatian Association of Employers welcomes the announcement that a fund will be created for small and medium entrepreneurs because the fund will help the entire country to withdraw 1,2 billion euros a year from EU funds: “Very often, an entrepreneur cannot ensure its participation in EU projects on his own, so this could be a great solution for the entire country. According to the information I have, during the mandate of Gordan Maras, Croatia’s last Minister of entrepreneurship and trade, 20% of projects was declined when upon reception, 50% were rejected because of administrative hurdles and 30% when it came to evaluation” Lovrić said. “This is insane when we know that most of these projects were managed and written by the State – County development agencies and the Ministry, which is of course also State, rejected them. Rest assured that not a single small and medium entrepreneur will apply if the Prime minister fails to deliver on what he promised – simplified procedure and the creation of the Fund, in that case, we would lose 10 billion kunas a year” Lovrić warned.

Petar Lovrić – Croatian Association of Employers

Branko Roglić, the owner of Orbico which is one of the largest Croatian companies, is not very optimistic after the meeting: “I trust the Prime minister but I don’t trust the Croatian Chamber of Economy. Since it is an institution that has not gone through any reforms, I don’t see how it will be able to achieve any efficiency when it comes to reforms. Croatian Chamber of Commerce is a poster child of the socialist model of management and governing. We all expected it to be restructured two years ago when Burilović became the president of HGK but results cannot be seen. What will 450 that are sitting in the Chamber reform when there should only be 70 of them with a sole task of presenting the global economy? Roglić was resolute.

Branko Roglić – owner of Orbico

Tatjana Kos, director of Era believes in the Prime minister” I think there’s nothing left for us to do but wait and believe in him. We’ve tried everything else and we’ve hit rock bottom” she concluded. 


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