Further Tax Cuts Coming in January

By 19 May 2018

ZAGREB, May 19, 2018 - Finance Minister Zdravko Marić said on Friday that the Finance Ministry was aware of the potential negative effect of Agrokor, but that risks were much more pronounced elsewhere, for example in Petrokemija and Uljanik, adding that solutions were being sought and the negative effects were being calculated in the budget while at the same time efforts were being made to protect public finances.

Speaking at a conference on the Croatian money market, organised by the Tržište Novca Zagreb company, Marić said that responsible control of the expenditure side of the budget was continuing and that the budget surplus was being used to further reduce public debt and to finance a new round to tax cuts. "For now the budget is in line with our expectations. After two rounds of tax cuts there aren't any big or negative surprises in tax revenues, but there are some slightly positive ones," Marić said.

He added that the positive results over the past few years had created room for new talks about possible tax cuts, recalling that the focus of the first round of cuts had been on direct taxes. "In the next round, we will once again look at the whole system. There won't be as many changes, but in any case it is good that we discuss them again and that we can talk about cuts for the third year in a row and not about new taxes to fill the budget gaps," Marić said. He added that he expected those measures to be drafted by the summer and adopted by the government before the autumn session of parliament so that they could be implemented as of 1 January 2019.

Asked about his participation in preparing the law on systemic companies, dubbed Lex Agrokor, Marić said that he personally did not participate in writing the law and that that was evident from the former deputy prime minister Martina Dalić's correspondence. According to Marić, he was included in the initial phase of the correspondence but not in the later phase.

Asked whether a settlement would be reached for the indebted Agrokor food and retail conglomerate, he said he could not comment because he wasn't involved in that process. He added that he did not know in whose interest it might be for the settlement process to fail, claiming that the protection of national interests and those of taxpayers was in his focus.

Marić said that preparations to refinance two state bonds that mature in July were going well, that they were following global trends and were continuing the public debt management policy.