Prime Minister Andrej Plenkovic visited the British American Tobacco (BAT) factory in the Istria County town of Kanfanar on Friday, welcoming the company's latest investment of over 600 million kuna.

“The government cares about job retention. The 1,500 or so people currently employed represent an added value both for Istria and for the other areas of Croatia in which this company operates,” Plenkovic said.

He announced that the government, in light of the euro changeover and the energy crisis, had decided to take another step in easing the tax burden.

“The Ministry of Finance, in consultation with the Ministry of Economy, will put a proposal to amend the VAT Act to public consultation, under which the VAT rate for fuel wood, pellets, woodchips and briquettes, as well as for heating energy, will be reduced from the present 13% to 5%. This will further ease the tax burden on our citizens to help them cope with the energy crisis and rising energy prices,” the prime minister said.

He added that he hoped Parliament would adopt the proposed amendments soon after the summer recess.

Reporters were told that BAT continues increasing production and exports as well as hiring in Croatia. It is increasingly investing in achieving the carbon neutrality of its factories in Kanfanar and Virovitica.

After investing HRK 600 million in new production lines for heated tobacco products at Kanfanar and HRK 10 million in a logistics centre for new categories of products at Rijeka, BAT has opened a regional distribution centre at Pitomaca, where it will receive tobacco from 26 countries. It will be the central supply point for BAT’s factories in Augustow (Poland), Bayreuth (Germany) and Pecs (Hungary).

Thanks to the investment in the new production lines at Kanfanar, 70 new jobs have been opened, and because of the planned increase in production, BAT has announced new hiring.

“In Croatia, we have a single value chain which we have been strengthening continually, including agricultural production in Hrvatski Duhani, the Kanfanar factory and the iNovine national retail chain, while our Zagreb office administers the Adria region which comprises eight countries,” BAT Director-General Zvonko Kolobara said.

“On the path to carbon neutrality and strengthening the role of our products with reduced harm potential, the support of all stakeholders is very important to us, especially of the government,” he added.