Plenković Announces Lower Fuel Prices, New Tax on Extra Profits for Businesses

Croatian Prime Minister Andrej Plenković has unveiled a package of economic measures aimed at curbing inflation and protecting citizens' purchasing power. Key among these are anticipated reductions in fuel prices and the introduction of a tax on "extra profits" for businesses.

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We believe that if someone has a profit margin of 50 percent, something is economically wrong; that price is too high. It puts people at a disadvantage, as one price increase leads to another. We will try to send a message to medium and large enterprises that will be included in this tax framework; we will exclude those with 50 percent sources, micro and small are completely excluded.

Plenković stated that the government's anti-inflationary measures and the proposed tax are part of a comprehensive strategy. He highlighted that while collective bargaining will occur this year, significant wage increases are not expected within the current calendar year. However, pensions are set to rise once new legislation takes effect.

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We will reduce the price of both Eurosuper and Eurodiesel next Monday when the government makes a decision.

The prime minister explained the rationale behind the extra profit tax, citing concerns over excessively high profit margins, some reportedly reaching 50 percent. He argued that such margins are economically unsound and place consumers at a disadvantage. The tax is intended to encourage market fairness and potentially lead to price reductions. While micro and small businesses will be exempt, medium and large enterprises falling within the tax's scope will be targeted. Plenković expressed hope that the announcement alone might act as a preventative measure, encouraging companies to lower prices and margins.

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If you want to increase citizens' standard of living, we have been monitoring the outflow of quality people to the private sector for years; to motivate them, we consciously and intentionally increased salaries, but we could afford it. We undertook to reform coefficients, which no one wanted to touch for 30 years. We dared to enter that forest of coefficients. We do not think that wage growth in the state sector is the basis of inflation; it is the overall development of Croatia, two huge energy shocks.

Further details emerged regarding fuel prices, with Plenković announcing that both Eurosuper and Eurodiesel prices would decrease following a government decision expected the following Monday. He also addressed the property market, acknowledging that the state cannot directly control market prices for real estate and rentals, stating that high prices reflect what buyers are willing to pay. Regarding public sector wages, he defended recent increases as necessary to retain talent, emphasizing that these hikes are not the primary driver of inflation but rather a component of Croatia's overall economic development, compounded by significant energy shocks.

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It is difficult for any small landlord to go bankrupt; those who have the highest category where the lower limit was 100 per year per bed, now it will be 150, that's all, a symbolic implementation of the principle of fairness.