The Croatian Employers' Association (HUP) on Thursday welcomed the announced tax cuts, warning that taxes are not the only thing burdening employers and calling for a comprehensive reform of non-tax and parafiscal levies.

Welcoming the planned tax breaks, HUP said that it was happy the government had accepted its proposal to treat employers’ cost of vaccination against infectious diseases as a non-taxable cost.

“Without a reform of the public system (health and pension systems and public administration), more significant tax reduction will not be possible. It is therefore necessary to launch as soon as possible reforms that will reduce the budget expenditure so that the burden on the revenue side could be reduced more significantly as well,” HUP said.

It presented the latest Eurostat data showing that in 2019 the total share of taxes and social contributions in GDP was 38.7% in Croatia as against 41.1% in the EU.

The Croatian share was the highest of all new EU member-states’, slightly above Slovenia’s and around the share of the Netherlands, HUP says, adding that this shows that there is a lot of room for further tax cuts, notably if Croatia wants to catch up with more developed EU members.

Earlier in the day the government sent to parliament four tax reform bills which envisage cutting income tax from 24 to 20% and from 36 to 30% as well as profit tax from 12 to 10% for enterprises which make up to HRK 7.5 million a year.