Government Upset with Valamar’s Investment Delay

By 7 September 2017

“Enough with the blackmailing,” says the Finance Minister.

Finance Minister Zdravko Marić said on Thursday that he was fed up with blackmails and did not see any fiscal uncertainty in Croatia, responding to a journalist's question about the yesterday’s announcement by the major tourist company Valamar that it had decided to delay investment plans due to uncertain fiscal policies, reports on September 7, 2017.

Valamar Riviera announced on Tuesday it would postpone a two billion kuna investment in the Pinia accommodation facilities in Poreč and other facilities planned for the upcoming period due to uncertain fiscal policies for tourism investors, as well as the property tax.

“I will ask you just one question: what is this fiscal uncertainty? This government has managed to consolidate public finances, and for the first time we have reduced our public debt, we have reduced tax burden by more than two billion kunas, in particular with regards to the income tax and the corporate tax, and we have kept a reduced value-added tax rate for organised tourist accommodation sector. I do not understand what fiscal uncertainty they are talking about. Enough with the blackmailing and constant pressures on the government,” said Marić to a journalist's question ahead of today’s session of the government.

He added that, if people talk about fiscal uncertainties, then they should define what this exactly means. “We have talked with them about the property tax, and I do not understand why did they make such an announcement. They send such a message, and now we have to explain to the public and investors the fiscal uncertainties in Croatia. What fiscal risks?” asked Marić angrily.

He pointed out that he and Tourism Minister Gari Capelli held a lot of meetings with representatives of hotel owners. Responding to a journalist's remark that the property tax was the stumbling block, Marić reiterated that the final decision on the possible delay of the introduction of property tax would be known in the next few weeks.

“But I do not see what is new in the property tax in relation to their initial decision. In June, when they adopted the investment plan, the law was also in force, as it is today. There have been no changes,” stated Marić.

In June, the CEO of Valamar Željko Kukurin announced that the company would invest 873 million kunas in more than 300 individual projects this year and that the total investments would reach two billion kunas by 2020.

On Tuesday, however, the company announced it would delay the investment in the Valamar Pinia Family Suites planned for 2018 “due to uncertain fiscal policy for tourism investors and challenges in preparing the necessary technical documentation.” The company also said that the final investment decision for 2018 would be made at the end of November this year.

The property tax, which is feared by many, was scheduled to come into effect in January, but Prime Minister Andrej Plenković recently announced that, due to the public outcry, the introduction would be delayed until an unspecified later date. However, Finance Minister Marić then said that the tax perhaps would not be postponed after all.

Translated from