Union leaders today welcomed the announcement by Prime Minister Jadranka Kosor that the two percent crisis tax rate on incomes between three and six thousand kuna will be abolished as of July 1, and they also called for the abolition of the four percent rate on incomes above six thousand kuna.
Unions have been opposed to the crisis tax from the beginning as this measure has harmed the economy and increased the decline in consumption and job closures, so with today’s announcement from the Prime Minister, they are only partially satisfied because the “tax” has not been completely abolished and the decision takes effect only from July 1. The government compensates for its lack of courage for real reforms by still keeping its hand in the pockets of some citizens, said the president of the Croatian Union Association, Ozren Matijašević.
The “tax” should not have been introduced at all, as data shows that since its implementation, the number of newly unemployed has increased by 60,000, and illiquidity has risen from 22 billion kuna to 27 billion kuna, claims Matijašević. The president of the Independent Trade Unions of Croatia, Ana Knežević, states that the two percent tax rate affects 787,000 workers, while 193,000 employees pay the four percent rate. At the same time, the lower rate affects 213,000 pensioners, while the higher rate affects just over 10,000 pensioners. From this, it is easy to calculate that the four percent rate alone will not bring significant amounts into the state budget, so this rate should also be abolished before its application expires at the end of the year, allowing for greater consumption growth, emphasizes Knežević.
