Croatia's Tax Freedom Day 2010

Croatian Taxpayers and Citizens Celebrate

Tax Freedom Day, June 10, 2010!

Dan Porezne Slobode

Nacional - Croatia's Independent Weekly Highlights 2010 Tax Freedom Day

Message from Natasha Srdoc

Today is Thursday, June 10, the 161th day of 2010 and there are 204 days remaining. Most importantly, for Croatia's taxpayers and citizens, today is the first day that Croatia's citizens and taxpayers stop working for the government and finally begin working for themselves!  It is cause for celebration.

Croatia's value added tax (VAT) of 23% is the highest in all of Eastern Europe. 

Hence, nearly every quarter of the purchases that Croatia' citizens or businesses make - goes directly to Croatia's government.  Moreover, for ordinary Croatians, paying taxes to a government tarnished by political corruption and elected officials amassing vast amounts of unexplained wealth is most troublesome.  Government fraud and waste abounds in Croatia.  Fixed tenders and a non-transparent government is intolerable.

Croatia's business tax is more than double when compared to the low-flat tax nation of Montenegro which taxes businesses at 9%.  Most of SE Europe have much lower business taxes and Croatia's marginal income tax rate is also the highest in the region.

Croatia's government is making a meager attempt at initial tax changes which we believe will not contribute to increasing the nation's economic growth or attracting investors.  Croatia's business climate remains uncompetitive - a great loss for Croatia's hardworking citizens and its youth.

In India, workers enjoy their Tax Freedom Day in March and in the countries of Australia, Estonia and United States, taxpayers celebrate their respective tax freedom days in April.

For Croatia's citizens, it is difficult to spend nearly half a year working for unreformed government. Croatia's taxpayers are faced with inefficient government services, a deplorable health care system run by the state and poor services in many fields including an educational system in decline.

Croatians are clearly frustrated and the best option is to vote for pro-reform oriented leaders during the next election cycle. Demanding lower taxes and electing those that commit to implementing real tax reform - lowering taxes, eliminating tax loopholes and making it more simple and transparent is the best way forward.  It is time for Croatians to hold their elected representatives accountable.

• Croatia’s citizens total tax burden reached 43.7% of GDP in 2010

• Croatian taxpayers worked 160 days for the spendthrift Croatian government and on June 10, they start working for themselves.

• Compared to the previous year, Croatia’s taxpayers are working 8 days less for Croatian government in 2010 - due to the fact that they were not able to bear higher tax burden.

• Economic downfall in 2009 (-5.8%) continued in 1Q10 (-2.5%) whereby diminished economic activity resulted in increased unemployment (currently 18%) and reduced personal and household consumption which led to the reduced tax revenues from VAT, income tax, corporate tax and social contributions. 

• Croatia's government needs to radically reduce government expenditures. Croatia's government recent decision to reduce the marginal income tax rate from 45% to 40% and reduce number of brackets is a very small step to address the growing challenges; however, it is insufficient. With the government's stated aim to cancel all tax exceptions and deductions, the ensued, much broader tax base allows for significant reduction of the income tax rates and adoption of the low flat tax rate. If the government does not further reduce the tax rate, its objective will be to increase government expenditures and finance them through the increased tax revenues of this "tax reform".

• Although the EU established a minimum VAT rate of 15%, Croatia's 23% VAT is among the highest in Europe - only Denmark and Sweden have higher VAT of 25% respectively.

• Croatia's 20% corporate income tax is the highest in south eastern Europe. Serbia, Macedonia and Albania have a 10% corporate tax rate and Montenegro has the lowest tax at 9%.

• Croatia's 40% marginal income tax rate is the highest in eastern Europe.

• While 275 million citizens of eastern Europe live in flat tax nations, Croatia continues with a highly progressive tax system.

• Croatia's government lives beyond its means which is obvious from a growing budget deficit (estimated at 3.6% in 2010) and continued growth of public debt (currently at 41% of GDP; at 60% of GDP including the guaranteed debt)which is an unsustainable trend.

Croatia's independent Nacional  - leads the way in reporting on Croatia's Tax Freedom Day:

10.06.2010. / 16:49 - Gospodarstvo

Dan porezne slobode: 'Do danas ste radili za Šukera, od danas radite za sebe'

Adriatic institut najavljuje hrvatski Dan Porezne Slobode, dan kada će hrvatski porezni obveznici prestati raditi za rastrošnu hrvatsku državu i početi zarađivati novac za sebe, koji građani Hrvatske slave… Više

Croatia'sTax Freedom Day 2009

CROATIA'S TAX FREEDOM DAY - JUNE 13, 2008

Croatia's Tax Freedom Day - Dan Porezne Slobode calculated by The Adriatic Institute falls on June 13, 2008, a day later when compared to last year's findings.  On Friday, June 13, 2008, Croatia's workers stopped working for the Minister of Finance and began to work for themselves. Nacional - Croatia's independent economic and political weekly featured Croatia's Tax Freedom Day through a major article.  Croatian taxpayers worked 164 days for the government this year.  Croatia's government expenditures reach 45% of GDP. 

Croatia's heavy tax burden includes a value added tax (VAT) of 22% which is the highest in eastern Europe.  Only two countries within the EU have a higher VAT than Croatia: Denmark and Sweden both have a VAT of 25%.

Natasha Srdoc, president of the Adriatic Institute called for lower tax rates - and the introduction of the flat tax of 15% for personal and corporate income including VAT.  The 15% flat tax for Croatia is based on a recent flat tax simulation model prepared by Natasha Srdoc.

Croatia's Tax Freedom Day was covered by independent broadcasting and print media including independent Radio 101, Radio Rijeka, Kapital Biz TV, Sutra 24 and a live interview from Silicon Valley, California with Natasha Srdoc on NOVA TV's evening program hosted by TV anchor - Mirjana Hrga.  Featured articles appeared in Nacional, Banka, Business HR, Lider Press, Privredni Vjesnik, Sutra and other media. 

Nacional - Croatia's independent economic and political weekly features the 2008 Tax Freedom Day:

Dan Porezne Slobode

By Marko Biocina 

NOVA TV

10 do 8

Pola godine Hrvati rade za drzavu, pola za sebe

Link: http://business.hr/Default2.aspx?ArticleID=8da51ea3-3b49-4b4f-ae08-e32f51cb1243&open=sec#

Domaci porezni obveznici u 2008. rade jedan dan duže za drzavu

Link: http://www.liderpress.hr/default.aspx?sid=46952

Dan porezne slobode ove godine 13. lipnja 

Link: http://www.privredni.hr/index.php?option=com_content&task=view&id=651&Itemid=1

CROATIA'S 2007 TAX FREEDOM DAY - 'DAN POREZNE SLOBODE'

VIDEO HIGHLIGHT:

NOVA TV - DNEVNIK.hr