Finance Minister Zdravko Maric Reveals Plans to Abolish Unpopular Tax

Lauren Simmonds

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September the 17th, 2020 – We recently reported on the fact that the much anticipated abolition of an extremely unpopular tax had been reconsidered by Finance Minister Zdravko Maric, who explained that those who believed the change was due to come into force at the beginning of 2021 had got their wires crossed.

As Poslovni Dnevnik writes on the 16th of September, 2020, Finance Minister Zdravko Maric said on Wednesday that the abolition of property transfer/sales tax is indeed planned during this government’s term, and that it has never been specified that this will happen on the first day of next year, which is something that people have somehow begun to believe.

As Finance Minister Zdravko Maric told reporters recently, there is no “rethinking” on this issue because “the Government never said that it would come into force on January the 1st, 2021”, but its programme does state that this government plans to abolish the unpopular tax during its mandate, but without any sort of specified time period, much less a specific date.

”Property transfer/sales tax, value added tax and food tax, these are all measures that we also put in the programme, but we didn’t define when, ie, when during the mandate we’d get rid of them,” explained Maric.

The property transfer/sale tax amounts to three percent of the market value of the purchased piece of real estate, this tax is income for cities and municipalities, and as some media portals, wrote yesterday, its abolition caused a revolt among various Croatian cities and municipalities, and finally a delay.

However, Finance Minister Zdravko Maric vehemently denies this, adding that in the current round of tax changes, the abolition of that tax was not originally envisaged.

He explained that from the first day of next year, there will be changes to income tax, ie lowering rates from 24 to 20 percent, or 36 percent down to 30 percent, as well as lowering the corporate income tax rate, from 12 to 10 percent, for all Croatian enterprises with a turnover of up to 7.5 million kuna.

In the context of a fairer distribution of the tax burden, and regardless of all previous tax changes, Maric pointed out that Croatia is still at the very top of the countries in terms of the share of VAT revenues in GDP.

Journalists also asked the Finance Minister about the postponement of the payments of leases, which was also appealed to by the employers’ associations, to which Maric said that these were civil relations between private individuals and business entities. He suggested that financial institutions themselves, following the example of the Croatian Government’s previous measures, should take additional measures to be accommodating towards enterprises and other clients.

Asked about the possible further prolongation of the moratorium on executions, Maric reiterated that this was down to the relationship between debtors and creditors, and that the state, for its part, had extended the deadline for another three months.

”We need to think and talk not only about the rights of debtors but also about the rights of creditors. But the creditors, who have these opportunities, should certainly follow the example of what we as a state have done, to enable some kind of repayment, or installment payment, or some other mechanisms that will make it easier to avoid great pressure in a short period of time,” stated Finance Minister Zdravko Maric.

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