Minister Marić, you could have been a bit braver, is the message from Ivan Idžojtić, a tax advisor from Zagreb, regarding the tax reform presented today at the Government by Finance Minister Zdravko Marić. Idžojtić, who was also part of the working group when the tax reform was adopted in 2016, says that almost all proposals that crystallized at that time have now been accepted and he does not understand why it took so long.
– Finally, Minister Marić, you have finally realized that you must take some steps like paying VAT only after the invoice is paid or after the imported goods are placed on the market, and not before as before. We warned you, Minister, before that entrepreneurs who had to seek a refund of such input tax had to go through all sorts of things, but you did not react then. Namely, the refund would result in tax audits and disputes and proving, which often demotivated entrepreneurs. It is also a good thing that the system of calculating corporate tax for small and micro entrepreneurs is changing, those weakest, most credit-exposed entrepreneurs who have enough risk, and who are often judged by that tax risk, and they employ as many as 400,000 people – Idžojtić conveyed to both the minister and the readers of Lider.
In his opinion, he concludes, the tax reliefs presented today are not grand reliefs. He believes that part of these changes is bureaucratically related to EU directives, and part is just – cosmetics.
– Where is that reform of key content for public finances, the reform of excessive public spending – asked Idžojtić, who believes that this hot potato, especially now in a crisis, should be Marić’s main task, that is what the ministry should deal with, concluded Idžojtić.
From the Croatian Employers’ Association (HUP) they commented on the announced tax changes:
„We welcome the announced tax relief. We are pleased that the HUP proposal that the cost of vaccination against infectious diseases be treated as non-taxable has been accepted. However, we insist that retroactive application of this relief be provided, specifically from March 11, 2020, and that the measure be extended to employee testing. Due to COVID-19, costs for preventive measures have significantly increased, which HUP warned about today, such as protective equipment, setting up physical barriers, maintaining cleanliness of facilities and workplaces, i.e., cleaning contact surfaces and dr., depending on the activity ranging from a hundred to even 2000 kuna per employee. Therefore, it is necessary to further consider these circumstances. We emphasize that tax burdens are not the only thing that burdens entrepreneurs. HUP has been calling for a comprehensive reform of the system of non-tax and parafiscal levies for years, which significantly further burden business, and their purpose is often unclear. In addition, without reforming the public system (health, pension, public administration), there is no possibility of significant tax relief. Therefore, it is necessary to urgently initiate reforms that will reduce the expenditure side of the budget so that burdens on the revenue side can also be significantly reduced. Namely, according to the latest Eurostat data, in 2019, the total share of taxes and contributions for social security in GDP was 38.7% in Croatia compared to 41.1% in the EU. However, this share for Croatia was the highest among all new EU member states, slightly above Slovenia and on par with the Netherlands. From this, it is clear that there is significant room for further tax relief, especially if our goal is to catch up with more developed EU members. In these times when it is uncertain whether there will be any profit, it is necessary to reduce taxes for those companies that generate revenues above 7.5 million kuna annually. In further amendments, we propose other reliefs that are necessary due to the epidemiological and economic situation, such as extending the period for carrying forward tax losses, expanding the application of the VAT rate of 13%, and the mentioned reduction of corporate tax for all taxpayers.“
