FinMin: Fourth round of tax reform completed, time to pause for a while

NEWS 14.01.2020 21:06
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Source: Davor Javorovic/PIXSELL (ilustracija)

Minister of Finance Zdravko Maric on Tuesday commented on calls for amendments to the Contributions Act because small companies are closing down, and said that the fourth round of tax reforms is completed and it is time to pause and see what has been done, recalling that many enterprises have appealed for equal treatment of all taxpayers.

The associations Lipa, Women in Adria and the Initiative of Professional Accountants (IPRH) on Tuesday called on Minister Maric to amend the Contributions Act claiming that their forecasts have proved to be true and that lots of small companies are closing down.

“Just as we warned when contribution payments were made compulsory for directors and board member regardless of the size and financial abilities of companies, according to our survey, lots of micro-enterprises are shutting down. There were hundreds of companies that closed down in 2019 and their owners will no longer be net contributors to the budget,” the three associations said in a joint statement.

The associations believe that the Contributions Act, in force since 1 January 2019, is contrary to the existing goals and strategies for the development of enterprise in the EU, including Croatia, and that it has had an extremely negative effect on start-ups, new business ventures and payments into the budget.

They repeated their demands made last autumn, asking that directors-beginners with up to three years of experience, directors whose children are below school age or attend school and who opt to work less than full time, as well as directors/liquidators of businesses whose monthly income is below HRK 15,000, be exempt from the payment of full-time job contributions.

“I will continue to maintain a fair stance toward them regardless of the fact that that side did not always provide correct, substantiated and proper information,” Maric told reporters ahead of an inner cabinet meeting.

He recalled that the fourth round of the tax reform entered into force on 1 January and that the ministry is working on several regulations which will most likely lead to some amendments considering what has been identified over the past few days, said Maric.

Considering that the fourth round of the tax reform is practically rounded off, Maric said that he was always prepared to discuss any further amendments to the tax reform. “However, I think it is time to pause for a while to see what has been done, what is good and perhaps what is bad.”

He said that the Tax Administration was working on an analysis, but that he could not go into detail because next week the first meeting of economic and finance ministers is scheduled and a lot of staff members both in Brussels and Zagreb were engaged in preparing that meeting.