Croatia's government on Wednesday introduced the so-called 'Cro Card,' a gift card scheme designed to spur domestic tourist spending by allowing companies to pay their employees up to 2,500 kuna (€336) in credit which can be spent on services in the country's hospitality industry such as hotels and restaurants.

The 2,500 kuna allowance is part of the maximum 7,500 kuna (€1,000) tax-free employment benefits which companies can pay out to their employees every year.

Finance Minister, Zdravko Maric, said that in 2018, some 1.25 billion kuna (€168 million) in tax-free benefits and bonuses had been paid out by Croatian companies, to a total of 490,000 employees. In 2019, the total increased to 1.76 billion kuna (€237 million), Maric said, in addition to 500 million kuna (€67 million) given to Croatian workers in the form of tax-free allowances for food and accommodation.

Cutting of taxes to these extra benefits and bonuses is seen as a key part of the government’s tax reform.

“These are strong incentives of the government’s tax policy, which will mainly benefit privately-owned businesses,” Maric said.

(€1 = 7.43 kuna)