{"id":23771,"date":"2023-06-02T15:45:02","date_gmt":"2023-06-02T13:45:02","guid":{"rendered":"https:\/\/www.predsjednik.hr\/?post_type=news&p=23771"},"modified":"2023-06-02T15:45:05","modified_gmt":"2023-06-02T13:45:05","slug":"economic-council-of-the-president-of-the-republic-cautions-that-abolishing-municipal-taxes-could-lead-to-higher-costs-for-local-services-thus-reducing-residents-income","status":"publish","type":"news","link":"https:\/\/www.predsjednik.hr\/en\/news\/economic-council-of-the-president-of-the-republic-cautions-that-abolishing-municipal-taxes-could-lead-to-higher-costs-for-local-services-thus-reducing-residents-income\/","title":{"rendered":"Economic Council of the President of the Republic Cautions that Abolishing Municipal Taxes Could Lead to Higher Costs for Local Services thus Reducing Residents\u2019 Income"},"content":{"rendered":"\n

“The Economic Council of the President of the Republic analysed the announced tax reform. The Government has three goals: increase the standard of living, preserve economic growth and strengthen the fiscal autonomy of municipalities and cities, however the Economic Council has doubts as to how these goals could be achieved. Furthermore, the Economic Council recognises the importance of election cycles in Government decisions, but cautions that short-term political dynamics should not influence long-term relations in the economy between the state, the employers and the employees. Given the trends of profits and wages in 2022, it would economically be prudent to leave wage increases to employers in 2023, because spillover effects on the general price level would be amortised precisely by higher profits from the preceding year. The idea to abolish municipal taxes is economically unclear as is the idea to encourage competition among local self-government units\u201d, stated Velibor Ma\u010dki\u0107, Special Adviser to the President of the Republic for the Economy, following the 6th session of the Economic Council of the President of the Republic held today in the Office of the President of the Republic.<\/p>\n\n\n\n

The President of the Republic Zoran Milanovi\u0107 also attended the Economic Council session.<\/p>\n\n\n\n

Talking about the Economic Council\u2019s conclusions regarding the announced tax reform, Special Adviser Ma\u010dki\u0107 added: \u201cIf you try to simultaneously strengthen the fiscal autonomy of municipalities and cities, then one asks what about taxation on tourism revenues and property tax, which, along with municipal taxes, is a means of achieving the invoked fiscal autonomy? Because of the unclear effects of abolishing municipal taxes on the decisions of local governments, e.g. possible higher costs for local services, it is possible that the residents\u2019 disposable income will diminish bringing into question the first and second goals\u201d.<\/p>\n\n\n\n

The Economic Council also has qualms about how the announced tax reform could weaken the already serious disharmony between pension contributions and the amount of future pensions. \u201cThe proposal brings into question the possibility of increasing contributions for the second pillar of the pension scheme in the future period. We caution that this is a basis for increasing the pension of current pensioners, and more important, a basis of the idea of the 2002 pension reform\u201d, Ma\u010dki\u0107 noted.<\/p>\n\n\n\n

In relation to the last session of the Economic Council of the President of the Republic held in December 2022, new expectations and projections predict a real GDP growth rate for 2023 of approx. two percent, with an expected inflation rate of over seven percent.<\/p>\n\n\n\n

Attending the session in addition to President Milanovi\u0107 and the Special Adviser of the President for the Economy Velibor Ma\u010dki\u0107, who is at the same time Chair of the Economic Council, were the following members: \u0110ula Borozan, Boris Cota, Bruno \u0106ori\u0107, Sa\u0161a Drezgi\u0107, Ana Grdovi\u0107 Gnip, Igor Matutinovi\u0107, Tomislav Hernaus, Marina Tkalec and the Assistant Adviser for the Economy Martina Ciglevi\u0107.<\/p>\n\n\n\n

\n \n <\/a>\n \n \n <\/a>\n \n \n <\/a>\n \n \n <\/a>\n \n <\/div>\n\n\n\n\n

PHOTO: Office of the President of the Republic of Croatia \/ Ana Marija Kati\u0107<\/p>\n","protected":false},"excerpt":{"rendered":"

\u201cThe Economic Council of the President of the Republic analysed the announced tax reform. The Government has three goals: increase the standard of living, preserve economic growth and strengthen the fiscal autonomy of municipalities and cities, however the Economic Council has doubts as to how these goals could be achieved\u201d, stated Velibor Ma\u010dki\u0107, Special Adviser to the President of the Republic for the Economy, following the 6th session of the Economic Council of the President of the Republic held today in the Office of the President of the Republic.<\/p>\n","protected":false},"featured_media":23764,"template":"","news-cat":[12],"class_list":["post-23771","news","type-news","status-publish","has-post-thumbnail","hentry","news-cat-news"],"acf":[],"yoast_head":"\nEconomic Council of the President of the Republic Cautions that Abolishing Municipal Taxes Could Lead to Higher Costs for Local Services thus Reducing Residents\u2019 Income - President of the Republic of Croatia - Zoran Milanovi\u0107<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.predsjednik.hr\/en\/news\/economic-council-of-the-president-of-the-republic-cautions-that-abolishing-municipal-taxes-could-lead-to-higher-costs-for-local-services-thus-reducing-residents-income\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Economic Council of the President of the Republic Cautions that Abolishing Municipal Taxes Could Lead to Higher Costs for Local Services thus Reducing Residents\u2019 Income - President of the Republic of Croatia - Zoran Milanovi\u0107\" \/>\n<meta property=\"og:description\" content=\"\u201cThe Economic Council of the President of the Republic analysed the announced tax reform. 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