Tax changes are yet another failure of Croatian politics. Not because they are inherently bad, but because they have a limited lifespan: only until the end of the HDZ’s era in power. It can already be assumed that the SDP will promise the return of the preferential VAT for caterers, the abolition of taxes for first-time property buyers, a more benevolent tax treatment for the media, or fees… ‘Playing to the wishes’ could bring something – perhaps decisive – votes. That money will be compensated on the other side – from banks, telecoms, energy companies… After a change of government, it starts all over again. A little from the void to the empty (as Ivan Vrdoljak would say), a little from the empty to the void. Encouraging for entrepreneurs, especially investors, who need to read (Narodne) newspapers every day so they do not miss some new provision that overnight destroys the financial structure of a million-dollar project. Instead of party workshops, Croatia needs a tax consensus. If we had exiled Zdravko Marić and Boris Lalovac to a deserted island, I believe they would quickly return with aligned tax changes. HDZ and SDP could include such a tax package among constitutional laws and pass it with a two-thirds majority. This would send a message to entrepreneurs about the stability of the tax system that cannot be changed without 101 parliamentary hands. Unfortunately, political pragmatism is not the only obstacle to that scenario. A comprehensive and meaningful tax reform also requires a proper state strategy: do we want and how to encourage agriculture, industry, tourism, will we promote high value-added IT or shoemakers and textile workers, who employ many unqualified female workers… Well, even if there are no prerequisites for a tax consensus, it is not forbidden to dream, even publicly.
Tax Reform: Real Changes Only with Consensus Between Marić and Lalovac
