The non-governmental organisation Voice of Entrepreneurs (UGP) called for a meeting with finance and economic ministers on Wednesday to discuss reforms that could ease the burden on companies, increase their competitiveness and make it easier to do business.

The UGP has seven proposals that it considers essential for creating a stimulating business climate.

The non-governmental organisation proposes raising the VAT threshold from €40,000 to €70,000 per year. This would allow micro and small businesses to operate competitively, adapt to inflationary changes and have a chance to grow.

The UGP also proposes to reduce VAT on catering, hairdressing and beauty services to 13%. This would promote growth and competitiveness, facilitate business activity, reduce the grey economy, increase wages and make prices more affordable.

One of the proposals is to reduce VAT on food production to 5%. This would help to reduce prices for basic foodstuffs, provide an opportunity for investment in development, have a positive impact on living standards and promote the development of domestic agriculture.

“Croatia is crying out for a serious reform of the tax system”

The proposals also include exempting reinvested profits from tax, reducing parafiscal levies and abolishing the special tax on coffee.

Coffee is taxed with a special tax in Croatia, which together with VAT amounts to 35% per cup, while in Slovenia this tax is around 9%, according to UGP.

The non-governmental organisation is also calling for a redefinition of the Trade Act, which would allow all small businesses in the retail, souvenir, floristry and bakery sectors to work on Sundays and public holidays if they so wish.

It is up to the ministers to decide whether they want to keep young people in Croatia and support Croatian businesses, UGP said. “Croatia is crying out for a serious reform of the tax system, which should be fairer, simpler and, above all, far less burdensome for micro and small businesses.”