Minister Zdravko Maric: Coronavirus Crisis Will Pass, One Problem Remains

Lauren Simmonds

As Novac writes on the 25th of September, 2020, a new round of tax reforms with changes that should take effect early next year will bring a reduction in corporate income tax rates, but a great opportunity for them is to withdraw money from European Union funds, said Finance Minister Zdravko Maric on Friday.

Ahead of the meeting on tax changes, which is usually organised at this time of year in the Croatian Chamber of Commerce (HGK), Minister Zdravko Maric said that he was carrying a “new message of tax relief” in the form of reducing income tax rates, noting that this also opens up a great opportunity for the use of European Union funds designed to help the economy fight the consequences of the ongoing coronavirus pandemic.

”What we’re offering in the fifth round of reforms is the lowering of the income tax rate, I think that’s more than enough, but I certainly want to hear what you want in terms of parafiscal levies and other burdens,” said Minister Zdravko Maric, adding that it turned out that lowering tax rates ultimately brings in more to the state budget, but that there’s a lower limit and as such it can’t just be reduced indefinitely. He warned that the coronavirus crisis will pass, but that we’ll be left with a demographic problem that will remain a burning issue.

According to earlier announcements, in the new round of tax reforms, income tax rates would be reduced from 36 percent to 30 percent and from 24 to 20 percent at the beginning of next year. There are also plans to reduce the corporate income tax rate from 12 down to 10 percent, for small and medium-sized companies, ie for all enterprises with an annual income of up to 7.5 million kuna.

Regarding the reduction of VAT rates on all food, Minister Zdravko Maric reiterated that this is part of the government’s programme, as is the abolition of property sales/transfer tax, but that the government hasn’t committed to any specific date when these measures should take effect.

HGK President Luka Burilovic said that businessmen were “extremely interested” in any tax relief.

He announced that he would ask Minister Zdravko Maric for measures to provide additional liquidity, especially over the next six months, as well as to speed up the procedures dealt with by HAMAG-BICRO in HBOR.

The head of the Croatian Chamber of Commerce also announced talks with the Ministry of Labour and trade unions on amendments to the Labour Law which will start next week. That law, he said, is outdated, and businessmen believe it should be more flexible. Flexibility, as he pointed out, shouldn’t be feared by good workers.

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