ZAGREB, April 26, 2018 – A comprehensive pension system reform with the statutory retirement age being gradually raised to 67, further easing of the tax burden and removal of administrative barriers, the continuation of the merger of hospitals and the establishment of a national clinical hospital for children as well as new legislation on public sector workers’ salaries are some of the measures in a 130-page National Reform Programme approved by the Croatian government on Thursday.
With regard to public finances, Minister Zdravko Marić pointed out the reforms in his sector would go in two directions – further reinforcement of the budget framework and planning and the continuation of the tax reform.
Taxes and the administrative burden will be further reduced, Marić said, announcing the preparation of a draft set of pertinent measures by summer recess so that the necessary legislation could be adopted in the autumn and go into force as of 1 January 2019.
The reform programme envisages the strengthening the State Audit Office and the adoption of new fiscal responsibility legislation and a new budget law by the end of this year.
In response to questions from the press, Marić said that the programme did not include plans for introducing a property tax. A tax of this kind has not been on the agenda since last year, and the intention is to advance the system of collection of utility fees (municipal taxes), Marić explained.
Labour and Pension System Minister Marko Pavić said that the planned overhaul of the pension system was to make it sustainable. Explaining why it was necessary to extend working life, Pavić says that only 1 in five retirees (19%) have worked full years of service (40 years) before retiring. Furthermore, Croatia’s pensioner-to-worker ratio is a mere 1:1.19, he underscored.
The minister announced the overhauling of the Employment Agency, with focus being on measures to deal with those who have been out of work for a long time. A total of 13 billion kuna from the European Social Fund has been made available to Croatia to address the marginalised on the labour market.
