Plenković: We Aim to Increase Citizens’ Net Income Through Tax Relief

Prime Minister Andrej Plenković stated on Friday that the government aims to increase citizens’ net income, especially for those with lower wages, through the next step of tax reform.

Commenting on the announcement of tax reliefs made by Finance Minister Marko Primorac, Plenković said at the celebration of 20 years of the Croatian Association of Counties in Opatija that the government has shown several times in recent years that it seeks to maximize relief for citizens and the economy and that it intends to continue doing so.

– Multiple rounds of tax reforms have brought relief of more than ten billion kuna – said Plenković, adding that there have also been reliefs from parafiscal levies.

He announced that the new package of tax reliefs and laws that the government will adopt during the autumn will enable citizens to increase their net income.

– What Minister Primorac indicated is the direction of seeking solutions to raise wages for those with lower net incomes – said Plenković.

Minister Primorac announced on Thursday after the government session a package of tax changes that should come into effect on the first day of 2024, which should, among other things, result in relief for the most vulnerable groups of citizens.

Primorac stated that there is a plan for tax relief, which he also discussed in the context of last year’s achieved surplus of the consolidated general government of 0.4 percent, where the central government was in deficit of 0.3 percent, but the local government had a surplus of 0.6 percent of GDP.

Thus, income relief should come for citizens in all income brackets, in terms of ‘changes and adjustments of thresholds’.

Primorac also announced that changes in the income tax system would be proposed, also in the direction of relief, which would concern those with low incomes.

Namely, as he pointed out, since increasing the basic personal deduction would no longer help the most vulnerable groups, but rather those in the middle and upper classes, other mechanisms for adjusting the tax system are being considered, as well as certain interventions in the contribution system, especially for pension insurance.

He emphasized that the primary goal is to utilize the fiscal space that exists at the level of local units for tax relief.

He did not want to speak more specifically about the announced tax interventions, but revealed that the tax reform is in the final phase of internal consultations at the Ministry of Finance, and after the entire planned procedure, the entire package of tax changes should be adopted by the end of this year and come into effect on the first day of 2024.