September the 4th, 2024 – Croatian energy prices are going to increase, as Finance Minister Marko Primorac recently revealed.
As Poslovni Dnevnik writes, Finance Minister Marko Primorac has revealed that Croatian energy prices are set to rise by 10 to 15 percent. He pointed out that the price of gas and electricity will not increase by 20 or 30 percent, as has been speculated about in some domestic media outlets over more recent days.
In the case of electricity and gas, the current subsidy will decrease gradually, but, he emphasised, the price increase will certainly not amount to 30 percent, but between 10 and 15 percent.
“When we talk about the protection of certain groups of people who will be taken care of at the expense of the budget, it’s important to state that we’re talking solely about the redistribution of budget funds,” Minister Primorac pointed out, adding that Croatian energy prices have actually been at increased levels for a long time.
He said that in this sense, the subsidy is less and less fully justified, because it is a subsidy that is being co-financed at the expense of all taxpayers, adding that keeping these subsidies at their current levels would cancel out price signals.
“If you have long-term increased energy prices, and you keep try to reduce that price for people and businesses artificially from the budget, then both people and business end up being left unaware that there’s been a long-term disruption in the market. They end up not being aware that there are any new prices, and then they aren’t motivated to use less energy, nor are they motivated to switch to other forms of energy, for example renewable sources, solar panels and so on”, explained the minister.
He also emphasised that this subsidy will certainly end up being reduced, but also that it should be known that such subsidies should be reduced gradually so that this reduction doesn’t inadvertently cause any negative effects.
Regarding fuel subsidies, he stated that they were practically abandoned, saying that over the past two years, the government often passed short-term decrees that reduced excise duties on diesel and petrol fuel. In the last year, these subsidies were halved, while this summer, the subsidy was entirely abolished. However, the government has partially kept the margin limit, which isn’t a subsidy from the budget, the minister said.
In addition to discussing Croatian energy prices, Minister Primorac stated that he hopes the new property tax changes will be introduced by the end of the week. He said that there’s been no resistance to the introduction of property tax, but also that in the past few years, due to the under-taxation of property and rental income, Croatia has “practically turned into a society of rentiers”, which according to him is not good.
When asked whether or not there’s a possibility that property tax will remain only on presentation this time and that it will not be applied, as it has been a couple of times before, Primorac said that everything is possible, but he also hopes that it will not come to that.
When asked who will be burdened the most by this new tax, the minister emphasised that everything will be seen after it is presented. He added that the Croatian Government’s intention is to cover all property owners who don’t actually use their properties, i.e. residential properties that are either under permanent lease or in which nobody actually resides.
