Jandrokovic: Tax reform should benefit lowest earners

Jandrokovic: Tax reform should benefit lowest earners

Jandrokovic: Tax reform should benefit lowest earners Izvor: Davor Puklavec/PIXSELL, Ilustracija

Ahead of a meeting of the ruling coalition parties on Wednesday regarding the proposed tax reform, Parliament Speaker Gordan Jandrokovic of the Croatian Democratic Union (HDZ) said that it is necessary to ensure that the effects of the reform would be positively felt as much as possible by citizens with the lowest wages.

Jandrokovic did not want to comment on speculation that citizens with average earnings would hardly benefit at all from the proposed tax cuts.

"At the moment, I don't wish to comment on that. Only after all of us coalition partners hear and see what Finance Minister Zdravko Maric is proposing, will we make comments," Jandrokovic told reporters on Wednesday.

"Always and at every moment, it is necessary to bear in mind all citizens (affected by the reform), particularly those with the lowest earnings," he added, and said that ballpark estimates on the reform's effects in the media even before the finance minister has presented his proposal can only cause confusion in the public.

Finance Minister Zdravko Maric had presented his tax reform plan to senior officials of HDZ on Monday, and, according to reports citing unnamed sources, the proposed changes will only benefit Croatians in the form of a lower VAT rate on fruits, vegetables, fish, and meat. This was seen as a departure from the earlier announced cut in VAT rate from 25 percent to 24 percent, which had been advocated in the election campaign by the current government of Prime Minister Andrej Plenkovic.

Ahead of today's meeting of the coalition partners, the leader of the junior coalition partner, the Croatian People's Party (HNS), Ivan Vrdoljak, said that it was time for cooperation and compromises.

"It's time for a policy of cooperation, talks and compromise in Croatia, and that is why we are going to see now what the proposals and explanations are. As far as the HNS is concerned, for years we have advocated tax reliefs on wages, by raising the salary threshold for the 36 percent tax bracket. We suggested that it would be wiser to reduce VAT vertically in individual sectors and not across the board by one percent. However we are going to see what is being proposed," Vrdoljak told reporters before the meeting.

Branko Hrg of the Croatian Christian Democratic Party (HDS) said that the announcement by Prime Minister Andrej Plenkovic that the tax reform would address people whose expenses currently mostly go towards paying for food and utility costs, gave hope that the tax reform package and taxation law was heading in the direction the Democratic Christian party advocated.

He added that his party had suggested that wages should be increased for those with the lowest wages, and that they should not be less than 4,000 kuna (€541).

The reform package will mostly impact people with monthly earnings of up to 10,000 kuna (€1,353) and they will feel the increase the most, adding that anyone with earnings of more than 10,000 kuna can cope more easily without a wage increase, Hrg said.

(€1 = 7.39 kuna )

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