The Croatian Prime Minister, Andrej Plenkovic, has stated that the percentage of VAT would be decreased by one percent. Speaking on Friday at a congress of Croatian export business the Prime Minister reiterated his governments measure to decrease value added tax from 25 to 24 percent.
The Prime Minister stated that lowering the rate of VAT would not be the only measure but part of a range of measures. "It will be part of measures which won't endanger the budget's revenue side. On the contrary, we believe that the combination of various measures will facilitate better revenues, reducing the fiscal pressure on both taxpayers and enterprises. All these combined will make Croatian exporters more competitive. That's why, in the coming period, we will see what can be done about the tax burden on salaries," commented Plenkovic.
The new tax reform will be prepared this autumn and should be in force by next year. However even with the decrease in VAT Croatia will still have one of the highest rates in the world. Some of the main economies in Europe have lower VAT rates than Croatia, the UK with 20 percent, Germany at 19 percent and France at 20 percent.