The tax burden on Croatian households and companies has been reduced by about 4 billion kuna (€541 million) as part of the tax reforms introduced since 2017, Prime Minister Andrej Plenkovic said on Monday evening, when asked to comment whether the government still had plans to reduce the general VAT rate.

“This easing of the tax burden has contributed to considerable economic growth and increased spending. Because of these changes, many of our fellow Croatians have seen their personal income increase, and that can be felt. I think this upcoming third phase of the tax reform will also produce desired effects,” Plenkovic said after attending a meeting of senior officials of the ruling Croatian Democratic Union (HDZ) party in Zagreb.

He added that a great part of the tax reform is aimed at increasing the disposable income of Croatians who currently spend most of their income on food and utility bills.

“We are taking care that the effects of the tax reform are felt the most by those with the lowest incomes,” Plenkovic told reporters.

He refused to specify whether there would be a cut in VAT rate levied on fruits, fresh meat, and fish, saying that this proposal has yet to be discussed with HDZ’s coalition partners, along with a possible increase in health insurance contributions.

Plenkovic said he believed he would get support for the proposed measures from coalition partners, because the tax reform is conducted systematically and professionally.

“Once the goals of the reform have been fully explained, it will receive the support of the parliamentary majority,” Plenkovic said. He added that he expected that after consulting coalition partners, the government would also continue the planned pension reform.

Plenkovic said that at their last meeting before the summer break on Monday, senior HDZ leaders summed up the activities of the past month, made a timetable of reforms for the upcoming period, and discussed government preparations for the autumn session of parliament following its summer recess.

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