As Poslovni Dnevnik writes on the 30th of December, 2019, next year will show the results of the Croatian Government’s reform package. Tax and pension reforms are part of a series of legal changes that should improve citizens’ lives on the whole, for both Croatian workers and Croats drawing their pensions.
However, Croatian retirees will not receive a higher pension next year either. For Željko, for example, the pension adjustment towards the end of the summer brought him only a small increase.
“It raised it by some 50 or 60 kuna. They raise the pensions a little, and then the rest goes up,” Željko told Dnevnik.hr.
An increase in the pension for 10,000 pensioners meant a loss in actuality, because they were left without free supplementary health insurance due to the income census. However, there was a solution to this problem.
“In the first month of 2020, the law will increase this threshold to 2,000 kuna and adjustments will occur to that threshold,” stated Višnja Fortuna of the National Council of Retired and Older Persons.
Tax benefits await Croatian workers, too, as long as they are under the age of 30. In order to secure higher wages for young people, the government has prepared a type of tax relief in the form of an income tax deduction. This tax is 100 percent lower for those under 25 and 50 percent lower for young people between the ages of 26 and 30.
For 23-year-old hairstylist Ingrid, this is good news: “I’m glad the taxes are being reduced, I’m only sorry that this happens once a year and at the end of 2020. It would be good to do it every month,” she said.
She also added that she hoped for better conditions: “Higher wages, an increase in the minimum wage, because we’re actually more or less working for minimum wage.”
Minimum wage will grow by around 250 kuna a month from the New Year going forward. Tax expert Anja Božina explains that the real question should be whether or not young people who earn lower wages will be covered by the tax burden.
“Let’s say that the effect might be felt by young Croatian workers who have about 6000 kuna in gross wages. It will be very small, some 200-300 kuna a month,” Božina said.
Employed Croatian workers who are over the age of 30 and who work an average Croatian salary can hope for an increase of 50 kuna per month. Igor Mamek, who has 25 years of experience in the hospitality industry under his belt, naturally expects a raise.
“Given that VAT will be 13 percent in 2020, my employer has announced that there will be an increase in pay,” Memek said.
Those in the Croatian hospitality sector see the lowering of VAT as a kind of last-minute salvation.
“Everyone who works with food will definitely have a much easier way of doing business and much easier conditions in order to compete with other Mediterranean countries. They’ll have room to raise their wages for their workers, they will be able to stop the quality workforce from going abroad,” said Marin Medak, president of National caterers’ associations, writes Dnevnik.hr.
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