Government adopts April package of measures to help economy

The Croatian government on Thursday adopted the April set of measures to help the economy hit by the coronavirus crisis, with Finance Minister Zdravko Maric saying that the measures showed the government's confidence in businesses.
Finance minister Zdravko Maric
 Boris Kovacev / CROPIX

"These measures, criteria and terms that we have stipulated and the way in which we are acting show quite clearly the high level of confidence we are placing in businesses and we are asking them to respond in kind. Because it is precisely this confidence that is the key precondition for achieving the solidarity we are all talking about," Maric said.

He said that everyone that can contribute to economic activity, and consequently to the functioning of the state, should make their contribution and help, based on the principle of solidarity, those that cannot work through no fault of their own.

The government worked out the April package of measures through several conclusions and decisions as well as through bills and legislative amendments.

The government decided to increase aid to businesses in difficulty to preserve jobs, increasing the net minimum wage from HRK 3,250 to 4,000. The government will cover all contributions payable on this amount, or about HRK 1,460 per employee. This measure will cost about HRK 8.5 billion and only employers who do not lay off workers will be entitled to it.

"This is not a wage. I hope and am confident that many businesses will pay their workers higher wages than that," Maric said, adding that everyone who receives the grant of HRK 3,250 for March will be exempt from paying contributions.

The latest data shows that 66,000 enterprises have applied for this measure for more than 400,000 workers, Maric said, adding that payments will be made before Easter, namely by 10 April.

Exempting businesses worst hit by crisis from paying income and profit taxes

Several of the measures adopted relate to payments of income and profit taxes and contributions.

"If your business is affected by the coronavirus, and this can be seen or will be seen in a revenue decline of more than 50% annually, you will be fully or partly exempt from paying income and profit taxes and contributions," the finance minister said.

In this way businesses with an annual revenue of under HRK 7.5 million, and they account for 93% of all enterprises, which suffer a revenue decline of over 50% will be fully exempt from paying income and profit taxes and contributions.

So far 62,086 businesses have applied for tax deferral, and 59% of such applications have been processed.

Maric said that donations for equipment needed in dealing with the coronavirus epidemic would be exempt from VAT.

Because of the coronavirus emergency, the government temporarily suspended the application of fiscal rules under the Fiscal Responsibility Act.

(€1 = HRK 7.609486)

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21. studeni 2024 22:58