Starting from the beginning of next year, the Law on Special Tax on Luxury Products will be abolished, from which Croatia has so far incurred more damage than benefit, it was announced at today’s government session.
Finance Minister Slavko Linić explained that the government proposes the abolition of this law because it has only brought symbolic revenues to the state budget, while simultaneously harming our craftsmen and traders, especially those dealing with jewelry and gold.
Last year, the budget collected only 24 million kuna from this tax, of which 20 million was from jewelry and the processing of precious metals. It was even worse in the first six months of this year when only 10 million kuna flowed into the budget, of which nine million was from jewelry and the processing of precious metals. This is only 0.2 percent of the revenue that the budget collects from excise duties and just 2.5 percent of the revenue from similar special taxes, says Linić.
Moreover, this tax becomes pointless once we enter the EU because Croatian citizens can then purchase all products in neighboring countries, and we also lose VAT on that type of product. We estimate that we would lose more in VAT than we gain from that revenue, noted Linić.
Prime Minister Zoran Milanović stated that we suffered damage from the “special populist tax” even before entering the EU, as citizens were already buying luxury products abroad – these are physically small products that are easily transported across borders.
Whoever enacted such a law, hats off to them – they harmed our craftsmen, traders, and the state budget, concluded Milanović.
