okrugli stol.JPG
(2L-R) Velimir Sonje, Hrvoje Zgombic, Boris Lalovac, Tomislav Coric.
Photograph: HINA /Zvonimir KUHTIĆ/ zk

Representatives of the two biggest parties on Thursday took part in the first of several round tables which the Croatian Employers Association (HUP) is organising ahead of the September 11 early parliamentary election.

Tomislav Coric of the Croatian Democratic Union (HDZ) and Boris Lalovac of the Social Democratic Party (SDP) said the euro would not be introduced any time soon, not before 2021 according to Lalovac, or in the next seven or eight years according to Coric.

Although the HDZ advocates introducing property tax, Coric said thatwould not happen before land registers were put in order, which calls for a big job. He said owners of only one property would be exempt from paying property tax. Owners of a number of properties would pay much higher taxes.

Lalovac said introducing property tax was a difficult and demanding job, so the SDP doesnot plan to impose it in the next term. He said that because of numerous technical prerequisites land registers could not be put in order in one term. The round table heard that, according to some estimates, Croatia loses HRK 5-10 billion annually because land registers are in disarray.

Coric and Lalovac underlined the importance of fiscal consolidation because 2017 would be a tough year and of the importance of political stability.

As for state property management, Coric said local units should manage farmland and that abandoned military facilities represented a big potential for investment. The HDZ would retain state ownership over some companies of strategic importance, such as the forest, road and water operators, while seeking buyers for the rest.

Lalovac agreed, saying another problem lay in the many facilities owned by local government. He said that over the past 25 years the government had been a poor manager.

Lalovac said fiscal consolidation was a top subject both for Croatia and the European Union. He said it was Croatia's misfortune that interest rates had a high share in total expenditures. He advocates generating a primary surplus and stabilising public finances.

Coric said the beginning of stabilisation of public finances, in parallel with economic growth which began in 2015, had saved Croatia from further credit rating downgrades. "However, we must not stay at this level credit rating. We must do our best to increase it, which calls for stable public finances and economic growth," he said, adding that money should be spent more rationally. He said the most important thing was to find a way to employ as many people as possible.

Coric said the HDZ would effect all tax changes in the first months of 2017 and change VAT in 2018. The HDZ plans to cut profit tax from 20 to 18% and to 12% for certain categories, because Croatia has the highest profit tax in the neighbourhood, he said, adding that tax cuts would be a signal to entrepreneurs to spend part of their profits on something else, hopefully in investing it.

The HDZ wants to raise living standards with income tax breaks. Coric said the party realised that the 25% VAT rate must be cut, but that each cut by one percentage point meant HRK 1.5 billion less in budgetary revenues.

Lalovac said the SDP would not cut VAT for now but would raise the non-taxable income from HRK 2,600 to HRK 3,000 and change tax brackets so that a majority of citizens would pay less taxers and have more money to spend.

"The people in the 40% tax bracket are on the most part young people with university degrees employed in export-oriented industries. We must see that young people don't leave because of this, in my opinion, punishment tax, and also because we are not offering a quality public administration service for that 40%," Lalovac said.

Related stories

SDP officials say HDZ would cut pensions by HRK 230

Two political camps announce key moves in tax system

Investments key for recovery, round table hears

Grcic: EC confirms Croatia recovering at accelerated rate

Latest news

Trump-style rhetoric is making world more dangerous, Amnesty says

Divisive and "poisonous" language used by politicians such as US President Donald Trump is putting vulnerable populations at risk and making the whole world a more dangerous place, Amnesty International charged on Wednesday.

Canada soon to begin resettling Iraqi refugees, most of them Yezidis

Canada will resettle 1,200 survivors of the Islamic State campaign to target religious minorities in northern Iraq, Canadian officials announced Tuesday. 

Breitbart editor resigns after release of paedophilia comments

Milo Yiannopoulos, a controversial editor at the far-right Breitbart news website, resigned Tuesday after the emergence of recordings in which he appears to defend sexual relationships between young boys and older men.

Trump administration opens door for mass deportations

The US Department of Homeland Security laid the groundwork Tuesday for mass deportations of immigrants living illegally in the United States under an executive order by President Donald Trump last month.

Brexit bill: House of Lords says public can change mind on leaving EU

The British public should be able to change their minds on Brexit - just as Prime Minister Theresa May did, the upper chamber of parliament heard Tuesday during a marathon debate on legislation to kick off EU negotiations.

Italian lawmakers, rights activists clash over gay sex club scandal

Gay rights activists and conservative politicians clashed Tuesday after the chief of Italy's anti-discrimination office quit over allegations that money had been authorized for gay sex clubs.

EU countries agree new rules to avoid tax evasion

European Union finance ministers in Brussels on Tuesday reached a political agreement on new rules to ensure that multinational corporations do not declare profits in the countries where they pay the least tax but in the countries where they generate it.

Trump condemns "horrible, painful" anti-Jewish incidents

US President Donald Trump condemned a recent spate of threats against Jewish community targets across the United States, during a visit Tuesday to the newly opened National Museum of African American History and Culture in Washington.

FinMin expects Croatia to exit Excessive Deficit Procedure this spring

Finance Minister Zdravko Maric said on Tuesday Croatia could exit the Excessive Deficit Procedure this spring and that it was showing progress in correcting macroeconomic imbalances.

Austria seeks to create jobs, but new EU immigrants need not apply

Austria plans to create 160,000 jobs in the next three years by subsidizing companies, but the project has raised concerns because it effectively excludes people who recently immigrated from other EU countries.

Juncker: Not good for W. Balkans that some in Washington want to water down EU

European Commission President Jean-Claude Juncker said on Tuesday it was not good for Western Balkan countries that some people in the new US administration gave the impression of being against the European Union because those countries needed the prospects of EU membership.

Citizens invited to help create Croatian version of Monopoly

A project to create a Croatian edition of Monopoly, in which citizens can participate by submitting proposals and which could become a souvenir for tourists, was presented at a press conference on Tuesday.

German state approves full-face veil ban

Legislation that bans face veils in select public spaces and situations was agreed by the government of the southeastern German state of Bavaria on Tuesday.

Indian restaurant Gaggan in Bangkok named Asia's best for third year

Bangkok's Indian eatery Gaggan on Tuesday was named the best restaurant in Asia for the third consecutive year by Asia's 50 Best Restaurants.

HGK: 16 Croatian companies to exhibit at IDEX defence exhibition

Sixteen Croatian companies will exhibit their products at the 13th IDEX 2017 defence exhibition in Abu Dhabi, to be held on February 19-23.