(Photo: Igor Soban/PIXSELL) (Photo: Igor Soban/PIXSELL)

The bulk of government's latest round of tax reforms are set to take effect on January 1st, however, one segment of the reforms, which deals with a reduction in taxes companies pay on meals and accommodations for labourers, will take effect on Monday September 1st.

Employers have applauded the reforms, saying that they have been calling for this change for three years now.

Davor Majetić from the Croatian Employers Association said he was pleased that the government had accepted the proposed changes. Majetić said that it would lead to a few hundred million kuna in savings just from meals and accommodations alone. He added that the savings would then go to raising salaries, new projects, and creating new jobs.

However, Union leader Krešimir Sever said that the expected growth in net salary would come at the expense of gross wages, which would hurt the pension and health care systems and reduce citizen's credit rating.

"Given that net wages are low, workers will take any kind of raise even if it is detrimental to them in the long term," said Sever.

Source: HRT