18:01 / 21.11.2022.

Author: Domagoj Ferenčić

Business leaders dismayed with government's proposed new “extra profit” tax

Finance Minister Marko Primorac

Finance Minister Marko Primorac

Foto: Tomislav Miletic / PIXSELL

As Europe and the west in general hurtles towards what appears to be a massive economic crisis, government is steadfast in its belief that its plans to introduce a tax on the extra profits of companies is a responsible move. Exasperated entrepreneurs however, say they cannot understand government's reasons for introducing an additional tax, especially one on such a broad scale.

Many economists, such as Mariana Ivanov, say that this is a populist move stemming from Brussels, which Croatia must follow in terms of the implementation of taxes, and that Croatia and the EU as a whole, could face long-term economic consequences as a result: “The Tax Office, the Finance Ministry and government are not to blame, the blame lies exclusively with the European Commission, which is constantly taking a saw to the branch we're all sitting on. Long-term this tax on extra profits is absolutely harmful.”

The tax will apply to those companies with revenues in excess of three hundred million Kuna, and growth in profits of more than 20 percent when compared to the average of the previous four years. Finance Minister Marko Primorac said that the tax was a responsible move that would transfer funds from profitable companies to those who need assistance, for which he has received the backing of union leader Krešimir Sever.

Speaking at a meeting of Croatian exporters on Monday, Ivo Usmiani from pharmaceutical company JGL, was less than enthused by the proposed new tax: “We didn't expect this additional tax. I think it would be wiser to reinvest these profits.”

Shipping agent Petar Šimić said that the tax would only serve to punish the country's best companies: “Companies that are making investments, don't have that money on their accounts, they are using this gains to pay off creditors, for reinvestment, to create new jobs, to expand their capacities, and to remain competitive.”

Milka Kosanović from the Croatian Employers Association echoed these sentiments: “I share their bitterness. The fact that government reacts to profit as to something blasphemous is tragic. We create profits, but also new investments and new jobs. And we contribute a lot to this society.”

Source: HRT

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