Ministers Defend Introduction of Property Tax

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Government says that nothing much will change for citizens.

Minister of State Property Goran Marić and Finance Minister Zdravko Marić commented on the introduction of the property tax in Croatia, which is supposed to enter into force on 1 January. They said that the tax would not be a new burden for citizens and local self-government units, and that there is enough time for preparations prior to its introduction, reports Večernji List on March 29, 2017.

Asked by journalists how the property tax would impact citizens and local government units, Minister Goran Marić said that the recent session of the Association of Towns discussed the issues of financing of local government bodies and management of state assets. He added that any tax which would increase the existing tax burden would not be acceptable and that property tax can only be a replacement for the existing fees.

“If this is a replacement for the current utility fee, as this type of tax is now called, or a substitute for the tax on holiday homes, in other words if there is no additional tax burden, then it is an acceptable tax for local government units as well, since it will not affect their revenues and will also not be additional burden for citizens”, said Goran Marić. “It is absolutely impossible for the property tax to be introduced if utility fee is not discontinued. That would be unacceptable and that will certainly not happen”, he said.

Asked by reporters about the main benefits of the property tax, Finance Minister Zdravko Marić pointed out that the legislative proposal introducing the tax passed two readings in Parliament. “We have said that the utility fee, tax on holiday homes, and monument annuity would be consolidated into the single property tax, which will be introduced on 1 January 2018. This year will be used for adjustment to the new law, and that is precisely what we are doing”, said Zdravko Marić.

He added out that towns and municipalities are preparing for the introduction of the property tax, and that they have at their disposal the Tax Administration, the State Geodetic Administration, and the Ministry of Construction. “We believe that we have enough time, because, since the introduction of the value-added tax in 1997, there has never been a full year left for adjustment”, said Zdravko Marić.

He denied that local elections, which will be held in May, could slow down the preparation process, explaining that all deadlines have so far been met. “By 31 March, all local government units will receive all registries from the government institutions, Tax Administration, Geodetic Administration and the Ministry of Construction. Then towns and municipalities will have eight months to prepare, adapt and check the registries. Before we start sending tax notices to citizens next year, we will make a final check to once again be certain that everything is ready”, said the Finance Minister.


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