January 19, 2020 – Dario Hrebak, the mayor of the town of Bjelovar reported on Friday on his Facebook page how the reduction of the surtax rate in the town led to the increase of the total tax revenue.
His Facebook post shows the numbers of income to the town, and his comment: “It’s interesting… In the first 17 days of 2020 the town of Bjelovar made 250,000 kunas more than in the same period of 2019, although the surtax rate was 6 per cent higher then. We’ll continue to follow what happens in the tax collection, and if the trend continues we will reduce the surtax rate in Bjelovar even further. This is the evidence that the income needn’t be increased only with increasing of the tax rate, rather that the increase can happen through the increased economic activity, which is generated when the taxes are reduced and the conditions created where the economy is free to develop, without the influence of the politics.”
The change in the tax policy in Bjelovar started in March of the last year when the surtax rate was first reduced from 12 to 9 per cent. In December the town council went one step further, reducing it for 3 more per cent, down to 6, which is what the surtax rate has been since the beginning of this year.
We’ve written quite a lot about mayor Hrebak and the changes he and his team have been implementing in the central-Croatian town. In May Bjelovar made news when they opened up all of Bjelovar’s finance and budget transactions, establishing their town as the first completely transparent city in the country. After that, in September, we reported about Bjelovar becoming a fully digital town, keeping up with new technologies, opening things up to the citizens, simplifying their communication with the town administration, and also to allowing the town’s employees to be more efficient and make their jobs easier overall.
Maybe the example of Bjelovar shows that things can change in Croatia, and not only that, it also shows what the change could look like everywhere, and which directions local administrations and the national government should consider when drafting their policies.