Coronavirus in Croatia: Latest Tax Administration Report Cause for Concern

By 24 April 2020

The Croatian economy, much like the global economy, has been forced to grind to a halt owing to the ongoing coronavirus pandemic. In a time when Croatia, known for its seasonality in terms of employment, would be gearing up for the summer season and employers would be seeking out waiters, chefs, bar staff and more, the unemployment rate is only increasing.

For the Croatian economy, of which the strongest branch which makes up around 20 percent of GDP is tourism, coronavirus threatens absolutely devastating economic consequences. The trade sector, which is also of enormous importance, both in the sense of its connection to tourism and independently of it, is also suffering huge losses.

As Jadranka Dozan/Poslovni Dnevnik writes on the 24th of April, 2020, the latest report from the Tax Administration shows that there has been an enormous drop of six billion kuna in all activities since the beginning of April 2020 thanks to the coronavirus pandemic and the numerous economic restrictions that have been introduced in order to try to flatten the infection curve.

In all activities which go through the fiscal system, the number of invoices issued fell by as much as 52 percent last week in the retail and wholesale/trade sector, according to the latest data from the Tax Administration.

This is a significantly higher decline than in the second week of April (when it was 34 percent in total and 24 percent in trade), the reason being that this year, Easter, ie the pre-festivity spending period, took place a week earlier.

A more realistic picture of the recent decline has been given by the first three weeks of April 2020. As touched on above, from the latest tax report, it can be been seen that in all activities since the beginning of April, there has been a huge six billion kuna drop, which is 44 percent or 4.58 billion kuna less than in the first twenty days of April 2019.

Over the past three weeks, trade turnover was 36 percent or 2.68 billion kuna lower than in the comparable period last year. Thus, in the first three weeks of April 2019, close to one billion kuna (956 million kuna to be precise) was fiscalised, and in the twenty days of April this year, only 91.5 million kuna has been fiscalised, a massive 91.5 percent less than last year.

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