ZAGREB, September 4, 2019 - The opposition MOST party organised a round table discussion in Zagreb on Tuesday to present its proposals for tax cuts in light of planned legislative changes.
It was the first in a series of round tables that would be held and it focused on the tax system and demographic policy. Suggestions made by economists and tax experts should contribute to demographic policy, give an impulse to businesses and boost investment in education, research and development.
"Our view is that halfway demographic measures are not effective. Conventional solutions are not producing results. Measures for demographic revival should be concrete and financially tangible and should be passed immediately," MOST's leader Bozo Petrov said.
Mislav Kraljević of the party's Economic, Financial and Business Council said that income tax reliefs on dependent children should be replaced by fixed-amount allowances that increase progressively with the number of dependent children, regardless of the amount of the parents' monthly income.
"The purpose of this measure is to help low-income citizens who are currently not subject to taxation and who do not benefit from any tax rate reductions. They constitute a majority of employed people in Croatia, and this proposal is the only possible measure that can have a positive effect on their net wages. This measure has a clear positive demographic effect and would lead to a complete redesign of the child allowance system," Kraljević said.
The executive director of the American Chamber of Commerce in Croatia, Andrea Doko Jelušić, said that the AmCham had drawn up recommendations for changes to the Croatian tax system. She said it was necessary to increase the non-taxable income from 3,800 kuna (€514) to 4,800 kuna (€650) and to reduce the income tax rates. She said that the first income tax rate should be cut from 24% to 12% and that the second rate, of 36%, should be reduced considerably.
"Croatia must take measures to become more competitive in relation to its peers in the neighbourhood," Doko Jelušić said.
Davor Huić of the Lipa taxpayers' association said that the tax system should be simplified and brought closer to a flat-tax model. He added that the government must find a way to cut public spending, which he said was among the highest in Europe. "It is absurd that the Croatian public sector is constantly growing while the number of people for whom this sector is working is continuously falling," Huić said.
More news about taxes can be found in the Business section.
