Finance Minister Zdravko Marić said on Wednesday that tax cuts were not a guarantee of higher net wages but that efforts would be made to make that happen because of the idea behind tax cuts was higher wages, higher employment and investments.
Marić recalled that the HDZ party's platform envisaged certain tax changes, including plans to reduce income tax rates, adding that the party stood behind that and that they would be an integral part of the government's program.
He said that the government would continue with tax relief, but not this year since major legislative changes regarding the taxation system always took effect with the start of a calendar year.
"We must not ignore the coronavirus pandemic. The situation with the state budget is not great. We will continue with our plans to reduce taxes, but not this year. As far as major legislative changes to the taxation system are concerned, there are processes to follow; which include public debates and two readings in parliament. At the earliest, this will take place at the beginning of next year," he said.
Marić noted, however, that lower taxes were not a guarantee that net wages would grow because that depended on employers, and in that context, he recalled that not everyone had lowered prices when the VAT rate was reduced.
After four years of balanced budgets, this year would see a rather large deficit, which, he noted, had been compensated for to a large extent with financing activities on the domestic and international markets, such as bond issues.
The minister concluded by saying the coronavirus crisis should be used as an opportunity to learn lessons and take steps that would put Croatia back on the right track towards higher growth rates.
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