Politics

Parliamentary Majority Rejects Workers' Front Bill on Digital Services Tax

By 5 May 2021
Parliamentary Majority Rejects Workers' Front Bill on Digital Services Tax
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ZAGREB, 5 May, 2021 - The parliamentary majority on Wednesday rejected a bill by MP Katarina Peović of the Workers' Front party proposing the introduction of a tax on digital services, saying that Croatia advocated a global solution rather than unilateral measures.

"The government has from the start advocated a global solution because it believes that unilateral measures cause distortion in the EU market and disrupt competition, which is why it did not launch an initiative to tax digital services," Finance Ministry State Secretary Zdravko Zrinušić said.

The deadline for an international consensus on the matter was moved because of the coronavirus pandemic to the middle of this year, he said.

"One should propose a balanced and stimulating tax policy rather than a restrictive one that would reduce Croatia's competitiveness," said Darko Klasić of the HSLS/Reformists caucus during a debate on the bill.

The purpose of the bill is not to tax small and development-oriented digital companies, but only technological giants whose revenue, from the global perspective, exceeds HRK 5.6 billion and who have not suffered any damage due to the coronavirus crisis but have seen an increase in revenue, Peović said while presenting the bill.

She said that several EU countries had introduced such a law and that her party was proposing the same for Croatia.

"The basic purpose of the tax would be to ensure additional budget revenue, which would be used to develop telecommunications infrastructure in Croatia, because we know that the internet here is among the slowest in the EU," said Peović.

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