Government reduces parafiscal levy, amends Consumer Protection Act

The government on Thursday slashed the water supply tax by 25 percent which entrepreneurs and investors pay during construction, with Agriculture Minister Tihomir Jakovina saying entrepreneurs would save HRK 40 million annually.

The cut was made according to a government decision on the reduction of parafiscal levies in 2015 and 2016. This is one of nine measures to reduce those levies. By the end of this year, parafiscal levies will be slashed by HRK 300 million in total.

Speaking to the press after the government session, Deputy Prime Minister Branko Grcic said non-tax levies for entrepreneurs would be further reduced after the summer holidays.

Also today, the government adopted a decision to fully subsidize regular students' participation fee in study costs and to co-finance the material costs of colleges over the next three years, for which the government will set aside HRK 1 billion.

This year, the Science, Education and Sports Ministry will set aside HRK 50 million for subventions and material costs, HRK 300 million in 2016, HRK 315 million in 2017 and HRK 335 million in 2018.

The government also sent to parliament a bill of amendments to the Consumer Protection Act as well as an opinion in which it supports draft conclusions by the parliamentary finance committee on the adoption of a solution for citizens with loans pegged to the Swiss franc.

In conclusions endorsed in mid-June, the committee proposes that banks sign annexes to contracts on those loans and to calculate overpaid interest based on a Supreme Court ruling. It also calls on banks to propose a comprehensive solution for citizens with CHF loans.

Also, the central bank has the obligation to submit a report on the issue of citizens with CHF loans and propose measures to help them.

The conclusions support the Finance Ministry's announcement that it will urgently draw up a law on housing loans and the Justice Ministry's proposal to reduce default interest and introduce the institute of consumer bankruptcy, while the government has the duty to draw up a package of regulatory tax measures.

Also today, the government adopted a decision to launch the consolidation of the management of existing radio-communication networks.

The government also decided to set up a national coordinating centre for European structural and investments funds. Grcic said that in the first six months of this year, Croatia received HRK 2.73 billion from EU funds, two and a half times more than in 2014.

(Text: Hina)

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