Zagreb - Finance Minister Marko Primorac on Tuesday dismissed the opposition claims that the amendment of nine tax laws is "the waging of a war" against the largest cities, saying they are steps forward in fiscal decentralisation after a long time.
"These are reform steps forward in increasing the autonomy, fiscal decentralisation and financing of local units," he said in parliament, presenting the amendments aimed at raising wages, maintaining economic growth and boosting the fiscal autonomy of local government units.
Primorac labelled as incorrect the claims that the pension insurance system is being encroached upon in order to wage a war with mayors. "The fact that someone will pay less in contributions actually benefits cities because their income tax base is being increased."
The government did not think it was opportune to relieve the tax burden on enterprises which generated considerable profits, but focused on those needing help the most, citizens, notably those with the lowest incomes, he said.
"No one is happy that, in order to increase citizens' real purchasing power, we have to encroach on the system of incomes and contributions, but that is the only way to increase citizens' real purchasing power, because VAT cuts over the years have not resulted in lower prices, unfortunately."
The amendments will in no way impact future pensions or the sustainability of the pension system, the minister said.
Opposition says amendment of nine tax laws is no reform
Peđa Grbin of the Social Democratic Party said nine laws were being amended so that wages would go up by €17 on average. "This shows the government's impotence to do something concrete for citizens and (PM) Plenković's willingness to strike at some of the foundations of the economic policy, such as pension system stability, in order to ensure a war with the mayors of the largest Croatian cities."
Emil Daus of the Istrian Democratic Party said that "the country becomes more and more centralised ahead of every election" and that "robbing Peter to pay Paul" was not a reform.
Marijana Puljak of Centre agreed that this was no reform. "The subheading of these changes is: The Supreme Leader is bringing gifts and the evil mayors will take them away from you."
Dario Zurovec of Fokus welcomed the tax cuts for citizens but said that a real reform would be "reforming (power utility) HEP or bringing order to (energy company) INA."
Davorko Vidović of the Social Democrats said wages would not go up and that the state would not become financially decentralised, but the system would become complicated.
Ruling majority asks opposition to tell citizens why they are against higher wages
MPs of the HDZ and the ruling majority said that instead of complaining, the opposition should tell citizens why they were against higher wages.
Majda Burić (HDZ) said Grbin and the mayors of Zagreb, Rijeka and Split were "either ignorant or incompetent or both."
Dario Hrebak, leader of the HSLS and mayor of Bjelovar, said his city proved that it was possible to abolish municipal tax and increase revenue.