The government wants to further reduce the tax burden on citizens and businesses. Employers, for their part, claim that lower taxes are the only way to ensure wage growth.
The fourth round of tax reforms is the first major task facing the newly reconstructed government of Prime Minister Andrej Plenković. So far the Plenković government has reduced the tax burden on citizens and companies by roughly six billion Kuna, and a one percent reduction in the VAT is expected to take effect on January 1st of next year.
Employers warn that the biggest portion of manufacturing companies have a profit margin of less than five percent, meaning that even that entire sum were transferred to wages it still wouldn't be enough to keep employees happy. Employers are also concerned about undeclared labour and ensuring that only registered companies can buy building or trade supplies.
The goal of the reforms is to ensure wage growth and competitiveness. Finance Minister Zdravko Marić is expected to present the new tax reforms measure by the end of the month.
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