Zagreb - The Croatian parliament on Friday adopted the tax reform package with a majority vote and the new bills should enter into force on January 1, however, unsatisfied because their amendments were rejected, the Opposition led by the Social Democratic Party (SDP) walked out during the vote.
The reform package includes amendments to the Income Tax Act, under which, as a result of an amendment submitted by the government, descendants, spouses and other family members will not be obliged to pay income tax on inherited pension savings from the second pension pillar. Parliament also amended the Profit Tax Act and the Contributions Act.
The biggest change concerning contributions is that pension and health insurance contributions will in future be compulsory for 'other income' at half the usual rate and will be set at 10% and 7.5% respectively. The reform package also comprises the General Tax Act, the laws on administrative stamp duty and on administrative cooperation in the field of taxes, amendments to the Customs Service Act and amendments to the Tax Administration Act.
After the package was adopted, Finance Minister Zdravko Marić told reporters that the reform was designed to simplify the entire tax system, improve its transparency, ensure greater justice and also to create favourable conditions in public finances to facilitate tax reliefs. "I think that we have succeeded in that. This is an all-encompassing and complete reform. The 43-hour parliamentary debate was preceded by hours of dedicated work by an expert task force," Marić said.
The tax reform is one of those elements of the government's programme aimed at growth, employment, and demographic renewal, he said. (Hina)