Zdravko Marić: Upcoming Alignment of Excise Duties with EU Directives

The situation with Uljanik will not jeopardize the tax reform, said Finance Minister Zdravko Marić on Wednesday, announcing certain changes in the excise duty system and that Fina will provide information during the day on how blocked citizens can check their status.

When asked by reporters before the narrower cabinet of the Government whether the situation with Uljanik could jeopardize the tax reform, Marić said he did not want to comment on Uljanik at this moment, reiterating that it is not the time for that, adding: “The tax reform is intended for all Croatian citizens – taxpayers to feel it, and no special case should bring that into question. I will insist that we continue with the implementation of the tax reform and tax relief.”

He stated that regarding the tax reform, 16 laws and 30 subordinate acts will not be changed again, but a smaller number. “We will simplify procedures; on the other hand, we must start to combat the forms of tax evasion that we have recorded even more strongly,” says Marić, announcing that more details will likely be revealed during the Government session next week.

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When asked whether the announcements of a drastic increase in excise duties on cigarettes and alcohol will be realized, he emphasized that he views the tax system exclusively in terms of overall tax relief. Recently, the Ministry of Health announced changes to the Law on Mandatory Health Insurance, which includes preventive taxes on alcohol and cigarettes.

Regarding excise duties on tobacco products, he said that Croatia had a transitional period after entering the EU to reach the minimum amount of excise duties. “We do not have to remain at that minimum amount, but such proposals have not been fully communicated with the Ministry of Finance and at the government level; this needs to be discussed,” claims Minister Marić.

He emphasizes that there will be certain alignments with EU directives in the excise duty system as well as simplifications for taxpayers. Primarily, this is related to electronic communication and the correction of deadlines regarding excise duties on alcoholic beverages and similar, he noted. The details of the actual amounts of excise duties, he says, will be presented when the entire package is published.

Fina will provide information on how blocked citizens can check their status

Commenting on the fact that some blocked individuals still do not know where they can see if their accounts have been unblocked, Marić said that Fina will provide a brief information to blocked citizens during the day on how and in what way they can check their current status.

“There is a smaller number of citizens who use the e-citizen services where they can check that status. At the same time, all creditors under the existing law are obliged to send notifications within 60 days if there have been any corrections, and there has been a write-off of up to 10,000 kuna for creditors. Ultimately, each of the blocked individuals can go to the Fina counter and check that status free of charge. We intentionally aimed for the law to come into effect last Saturday so that the diligent people at Fina could work through the entire weekend, go through their entire database, and carry out all those write-offs so that on Monday morning those statuses would be corrected,” said Marić.

On the other hand, he emphasized that the Government cannot force anyone to write off debts. He stated that the government provides creditors of the so-called group 2 with a stimulating measure, so if they believe they should follow the Government’s example, they will do so. “However, we cannot influence anyone or exert pressure; that is their autonomous decision,” believes Marić. He assumes that some local units will follow the Government’s example and write off debts for those blocked, related to debts for utility bills.

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To address the problem of insolvency of citizens whose accounts are blocked, the Government proposed three draft laws to the Parliament that have been adopted – the Law on the Write-off of Debts for Individuals, the Law on the Implementation of Enforcement on Monetary Assets, and amendments to the Bankruptcy Law, and a fourth – a new Enforcement Law is in preparation.

With the implementation of the Law on the Write-off of Debts for Individuals, as of Saturday, debts of 150,474 citizens who had debts to the state of up to 10,000 kuna plus interest have been written off, and the amount of the written-off debt is 1.338 billion kuna.

The purpose of this law is to write off debts of up to 10,000 kuna from the state and legal entities of which the state is the sole founder or exclusive owner, such as HRT or HZZO, for citizens who were blocked on December 31, 2017. The same law provides for a measure that such debts are also written off by local government units and private creditors, such as telecommunications operators, and to motivate them to take such action, the law provides for tax incentives.

At the beginning of August, the Law on the Implementation of Enforcement on Monetary Assets will also come into force, aimed at discouraging account blockages that last longer than three years, and it introduces a suspension of Fina’s actions if the claim has not been fully collected within three years, with an additional condition that there has been no collection on that claim in the last six months. The Government expects a reduction in the number of blocked citizens by about 70,000 and the amount of blockage of about 30 billion kuna from the implementation of that law, said the Prime Minister.

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Amendments to the Consumer Bankruptcy Law, which will come into force at the beginning of next year, are the third part of the package aimed at helping those blocked. The amendments to the law will simplify consumer bankruptcy to provide a flexible procedure for those long-term blocked for principal amounts up to 20,000 kuna to be released from obligations, covering more than 80,000 people.

“We tried to find a balanced solution that should not jeopardize the balance of the entire system, and it should be emphasized that obligations must be fulfilled. There is a certain number of citizens who have not fallen into these difficulties through their own fault. This second law concerning the Law on the Implementation of Enforcement on Monetary Assets is also ‘aimed’ for Saturday, the day before Victory Day. This law does not speak of debt write-offs. There is a write-off, but debts do not disappear,” emphasized Marić.

When asked to comment on the criticism that social criteria were not considered in finding solutions for the blocked, he emphasized that social criteria would jeopardize the very implementation of the measure.

“It would be a question of how and in what way all of this would be done in terms of implementation. For the remaining part of the debt, especially towards the state, let us not forget that the law provides for the possibility of requests for installment payments of the remaining debt. So now a part of the debt up to 10,000 kuna has been written off, and for the remaining part of the debt towards creditors from group 1, especially the state, the law provides for the possibility of installment payments of up to five years,” concluded Marić.