On the occasion of the first 100 days of Prime Minister Andrej Plenkovic's third cabinet, the Croatian Employers' Association (HUP) published a document on Tuesday with proposals for boosting the national economy in the period 2024-2028.

The main proposals envisaged by the HUP to ensure faster economic growth and achieve the European Union’s standard of living include further tax relief, a new labour law and the reduction of the standard VAT rate from 25% to 13% for the hospitality and catering industry.

With regard to tax policy, HUP says in its publication that taxation must be a function of promoting a culture of work.

The association therefore urges that the tax burden on labour be reduced by a further 10 percentage points, that the taxation of SMEs be reduced and that the tax thresholds be raised.

Investing in key sectors for future growth

In this way, the wages of highly skilled and trained professionals such as doctors, researchers, engineers, IT specialists and other highly skilled professionals will increase significantly, while labour costs for employers will remain the same, the association said in its publication.

The HUP is also in favour of a more flexible and open labour market, which is why Croatia needs a new Labour Act.

The association also calls for higher investment in research and development in order to reach the OECD average of 3% of gross domestic product (GDP) for R&D.

In terms of developing sectors that are considered crucial for future growth, the HUP publication highlights the IT sector, renewable energy, agriculture and food production as well as tourism, which can attract significant and good investments.

Employers also believe that the price of electricity paid by the business sector should not be higher than the price of electricity paid by households.