Croatia is to implement a series of tax reforms next January in an effort to boost its economy and qualify for adopting the Euro.
According to the country’s Economic and Fiscal Policy Guidelines for 2019-2021, income tax for employees earning more than 17,500 kuna (US$2,700) a month will be cut from 36% to 24%, while those earning over 30,000 kuna (US$4,700) will be taxed at 36%.
Meanwhile, value-added tax will be reduced from 25 to 13% for fresh meat, fish, fruit, vegetables and babies' nappies, while contributions to employment and labour injury funds will be abolished.
The document predicts that Croatia's state budget revenues for 2019 will hit 134.2 billion kuna (US$21 billion), while expenditure is expected to come in at about 139 billion kuna (US$21.8 billion). The government said it expects gross domestic product (GDP) to grow by 2.8% this year, slowing to 2.7% in 2019 and to 2.5% in the following two years.
With the predicted public debt to GDP ratio standing at over 70% this year, it is anticipated that Croatia will take several more years to reduce its debt burden to acceptable levels for Euro adoption as it is one of the most important criteria for entry, Xinhuanet reported.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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Croatia is to implement a series of tax reforms next January in an effort to boost its economy and qualify for adopting the Euro.
According to the country’s Economic and Fiscal Policy Guidelines for 2019-2021, income tax for employees earning more than 17,500 kuna (US$2,700) a month will be cut from 36% to 24%, while those earning over 30,000 kuna (US$4,700) will be taxed at 36%.
Meanwhile, value-added tax will be reduced from 25 to 13% for fresh meat, fish, fruit, vegetables and babies' nappies, while contributions to employment and labour injury funds will be abolished.
The document predicts that Croatia's state budget revenues for 2019 will hit 134.2 billion kuna (US$21 billion), while expenditure is expected to come in at about 139 billion kuna (US$21.8 billion). The government said it expects gross domestic product (GDP) to grow by 2.8% this year, slowing to 2.7% in 2019 and to 2.5% in the following two years.
With the predicted public debt to GDP ratio standing at over 70% this year, it is anticipated that Croatia will take several more years to reduce its debt burden to acceptable levels for Euro adoption as it is one of the most important criteria for entry, Xinhuanet reported.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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