ZAGREB, July 31, 2018 – Prime Minister Andrej Plenković said on Monday evening, when asked by the press whether the general VAT rate would be reduced, that the tax burden on households and companies had been reduced by about four billion kuna (540 million euro) as part of the tax reform since 2017.
“This easing of the tax burden has contributed to considerable economic growth and consumption. Because of these changes, many of our fellow citizens have seen their incomes increase and that could be felt. I think this third phase of the tax reform will also produce desired effects,” Plenković said after a meeting of the presidency and national council of the ruling HDZ party.
He said that a great part of the tax reform was aimed at increasing the disposable income of citizens who spend most of their income on food and household bills. “We are taking care that the effects of the tax reform are felt the most by those with the lowest incomes.”
Plenković would not specify whether there would be a cut in VAT on fruit, fresh meat and fish, saying that he would discuss this and a possible increase in health insurance contributions after a meeting with the coalition partners. He said he believed he would receive support from the coalition partners because the tax reform was being conducted systematically and professionally.
“Once the goals of the reform have been fully explained, it will receive the support of the parliamentary majority,” the prime minister said. He added that after consultations with the parliamentary majority, the government would also continue the pension reform.
Plenković said that at their last meeting before a summer break the HDZ presidency and national council summed up the activities of the past month, made a timetable of reform activities for the next period and discussed government preparations for the autumn session of parliament.
