Press Release - Comments on Draft Regulation (Excise Tax on Coffee and Non-alcoholic Drinks)

“We propose to postpone the entry into force of the ‘Regulation on the calculation method and amounts of the components for the calculation of excise tax on coffee and non-alcoholic drinks’ until January 1, 2021 to ensure predictability of the business environment,” said Andrea Doko Jelušić, Executive Director of the American Chamber of Commerce in Croatia.

“The Draft Regulation was published on February 15 with a proposal for entry into force on Sunday, March 1, 2020. AmCham believes that such a decision is not in line with the actions of the Ministry of Finance, which in recent years has had the commendable practice of adopting legislative changes at the end of the current year with the entry into force in the following year. Therefore, we propose to postpone the Regulation’s entry into force until January 1, 2021,” said Doko Jelušić, adding that it is necessary to take into account the timely adjustment of businesses that are affected by the legislative change, especially in the case of amendments that involve a greater financial burden. “Businesses need to be given sufficient time to make changes to their business plans and budgets,” stated Doko Jelušić.

AmCham supports the efforts of the Government of the Republic of Croatia to improve the health of Croatian citizens, and calls for the definition of a comprehensive solution concerning the fight against obesity. 

Industry-specific taxation without the comprehensive solution for public health and tax issues needs to be revised, so AmCham proposes additional amendments to the Regulation:

• As the variable taxation model will be introduced, the basic flat-rate tax burden should be abolished. This model, a combination of a fixed and variable tax burden, contradicts the announced objectives of the law, and increases the complexity of application.
• Improving the health of the general population requires a comprehensive approach. Isolation of sugar and its specific product group (non-alcoholic drinks containing sugar) is a partial solution that will not contribute to the solution of the complex public health problem. The taxation of methylxanthine and taurine is covered by the same argumentation, which is not justified in the harm assessment by the competent European bodies such as the European Food Safety Authority (EFSA). Therefore, AmCham proposes abolishing any tax burdens on non-alcoholic drinks containing methylxanthine or taurine, since there is no evidence of their harmfulness nor does their taxation contribute to achieving the objectives of the law.
• The non-alcoholic drinks industry representatives want to make a proactive contribution to improving health in Croatia. A partnership between the industry and relevant public health institution campaigns can be an example of a good practice in responsible behavior in pursuing common goals.
• Public authorities’ focus on public health activities (public health campaigns and amendments to tax acts and regulations) is expected. AmCham believes that achieving these goals requires a partnership with the business community and other parties. Achieving these goals and securing the necessary funds requires a productive co-operation between the industry and the competent institutions, as well as long-term planning of activities and costs; this is why AmCham calls for the definition of multi-annual plans related to legislative amendments.