The Croatian Employers' Association (HUP) seems surprised by proposed changes that are supposed to increase the minimum salary level of executives in companies whereby contributions paid from gross mandatory salaries will also rise, and therefore the HUP urges the government to consider alternative solutions for this matter.

On Thursday, the Finance Ministry put to public consultation several draft bills, including a draft bill of amendments to the law on contributions on salaries, as well as changes expanding the application of the 13 percent VAT rate as of 2019, reducing the general VAT rate from 25 to 24 percent as of 2020, and reducing real estate trade tax from 4 to 3 percent.

HUP finds that a possible increase in coefficients for calculating how much should be paid in contributions from higher gross mandatory salaries of executives and managers of companies would affect the performance of small and micro businesses and of startups.

The association calls on the government to base its draft proposal on the assessment of the effects of the projected changes.

HUP is hopeful that “dialogue with the relevant ministry will result in an alternative proposal”.

Public consultation on all bills lasts until September 6.