Experts do not expect the Government to pull a highly unpopular move like introducing a new tax in an election year.

Although speculation has been going on about the tax on properties for a longer period, it has again come to the attention of the public with the announcement by Finance Minister Zdravka Marić about the connection of VAT and the tax on properties. Namely, the Minister initially announced that there would be no introduction of the tax before the reduction of VAT, and subsequently announced that VAT would be reduced in 2020. Davor Huić, the President of the Lipa Association, which, as they themselves say, protects Croatian taxpayers, believes that it is uncertain whether the Government would go with such an unpopular move as introducing a new tax in an election year. "Lipa opposes this tax because we believe it would additionally burden taxpayers. There is enough room in the budget to make reforms to the system and save money without introducing new taxes. Besides, Croatia is a property-owning society in which most citizens own some property, and the introduction of a new tax would negatively affect a large number of people," Huić says. Boro Vujović, the Director of the Zagreb real estate company Opereta, believes that reducing VAT would have a beneficial effect on the property market, but at the same time, introducing a tax would not necessarily have negative consequences. "Croatia, along with Denmark, has the highest VAT on properties in the EU. In most countries, it does not exceed 10%, and some countries, such as Slovenia and Hungary, have two rates. On the other hand, the tax on properties does not have to be bad if it is rationally made and well communicated to the public. According to everything known, the new tax would bring smaller payments on properties to most Croatian citizens than they are now through the municipal surcharge and accompanying taxes," Vujović believes. Denis Čupić from F.O. Development believes that the tax on properties is a theme that extremely polarizes public opinion, with the majority of citizens and the business sector considering it a new and enormous burden, and naturally, its introduction requires exceptional political courage. "I assess the possibility that it would be introduced as a real value-added tax, especially in the pre-electoral year, as low in reality," Čupić says. He adds that when it comes to the tax on properties, one should distinguish between a simple tax that combines the municipal surcharge, the tax on holiday homes, the monument preservation tax and other fiscal payments, and a real value-added tax that is determined according to the size and value of the property. "We already have problems with a simple tax, as land register records are incomplete and uneven, both in terms of local self-government units and within the units themselves, and the state of property records is that not all properties are recorded in their actual sizes. If Croatia manages to update records to the actual state in the next two years, that will be the primary righteous basis for introducing a simple tax," Čupić says.

Izvor: Poslovni.hr

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