AmCham presents II. Set of Recommendations for Economic Relief

The American Chamber of Commerce in Croatia welcomes and supports the efforts of the Croatian Government to help entrepreneurs overcome the period of crisis caused by the COVID-19 pandemic by ensuring liquidity, protecting jobs and considering to significantly reduce all the obligatory parafiscal charges. After having just published its 2nd Set of Recommendations for Economic Relief, AmCham is starting to prepare recommendations on obligatory parafiscal charges and proposal for their significant reduction, that is abolishment.

The Government aid  involving a write-off of tax and other contributions certainly is a step in the right direction.  However, it is not acceptable to limit the right to a complete write-off in a manner affording them to small taxpayers only, while partial write-offs or postponement / payment in instalments apply to others.

Although such a measure provides relief regarding the lack of liquidity over the next several months, it is a significant burden to taxpayers in the period following the termination of the special circumstances and it will slow down the economic recovery. Therefore, AmCham proposes an extension of the scope of the measure involving a write-off of tax and contributions on salaries to include all companies whose activities are affected by COVID-19 regardless of their size.

Regarding the measures aimed at preserving the employment, AmCham supports an increase of financial aid to entrepreneurs aimed at maintaining the number of employees. Nevertheless, an introduction of percentage-based participation in coverage of costs of salaries should be introduced. The amount of current financial aid to entrepreneurs is not substantial enough to compensate for the salaries of highly skilled workforce leading to a possibility of leaving these employees without work and Croatian companies being ousted from the global market.

In addition, in order to protect jobs in all companies regardless of their sector of industry, we propose the introduction of a number of new legal categories of employment such as “furlough leave”, a model successfully implemented in Slovenia.

Taking into consideration an extreme seasonality of Croatian tourism, that will experience the next wave of demand, as well as financial income in the summer of 2021, AmCham proposes a whole set of sector specific measures such as immediate extension of measures designed to protect jobs to a period of 12 calendar months; write-offs of parafiscal taxes for a 12-month period; write-offs of taxes and contributions on salaries in correlation with the intensity of the decline in income of tourism companies; a correction of prices of electricity and water charged to tourism companies for a 12-month period.

AmCham’s II. Set of Recommendations for Economic Relief is available here.