Government proposes that Constitutional Court reject complaints against crisis tax

ZAGREB, Oct 12 (Hina) - The Croatian government on Monday held a session at which it proposed that the Constitutional Court should dismiss as unfounded complaints filed by President Stjepan Mesic and a large number of associations and individuals, who asked the Constitutional Court to assess if the Law on Special Tax on Salaries, Pensions and Other Income was in line with the Constitution.

The adoption of the said law was prompted by the current macroeconomic situation in the country and the purpose of the law was to ensure unobstructed and regular fulfilment of budgetary obligations, primarily the regular payment of pensions, salaries and social benefits, the government said in a statement.

The law introducing special taxes on salaries, pensions and other incomes was adopted in order to avoid a reduction of pensions and other benefits to vulnerable social groups and further cuts in salaries in the public sector, as well as to distribute the burden of the crisis evenly among all social groups, the government said.

The said law, which took effect on August 1, refers to salaries, pensions and social benefits exceeding HRK 3,000, and it envisages two tax rates, a 2% rate for incomes ranging between HRK 3,000 and 6,000 and a 4% rate for incomes exceeding HRK 6,000.