Plenković details anti-inflation plan, names central bank nominee

Prime Minister Andrej Plenković unveiled details of an upcoming anti-inflationary package, set to be presented to the government. The measures include taxing excessive profit margins and raising the threshold for short-term rental taxes, with local authorities empowered to set the final rates.

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The context to which this applies also includes certain changes to the law, for example, the profit tax. So, tax on gross margins and excessive margins, because the analysis showed certain deviations that go beyond what would be logical and normal business with adequate profit. Somewhere such deviations are too large. Therefore, changes would be made to tax such situations.

Plenković highlighted that the package has coalition support and emphasizes budgetary discipline. He assured that no new, unforeseen expenses would jeopardize the state budget. The government aims to mitigate inflationary pressures, largely driven by energy price hikes due to the Middle East conflict and some domestic factors.

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This measure was introduced at the beginning as support during a period of high unemployment, but now there is a "disbalance" that needs to be corrected.

Key proposals involve changes to the profit tax, specifically targeting "excessive" margins identified through analysis. Additionally, the government plans to increase the flat-rate tax for self-employment, which has seen significant growth, to address an imbalance with non-self-employment sectors. This measure was initially introduced to support employment during high unemployment but is now deemed disproportionate.

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We are also talking about increasing the flat rate, or rather the lower threshold for short-term rentals, for which we are leaving delegated authority to local self-government units to determine it, but we think this flat rate is simply too low and needs to be increased, which will also contribute to reducing inflationary pressures.

The prime minister also announced the abolition of income tax on pensions, calling it a significant step to improve retirees' living standards. He expressed confidence that all citizens would benefit from the measures, easing the burden of rising prices. Plenković confirmed that Ante Žigman, the current chairman of Hanfa's management board, would be nominated as the new governor of the Croatian National Bank, citing his extensive experience and qualifications as an economist.

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This is a position for which, according to the nature of the job and the expected qualifications, an extremely experienced, competent, and professional person should come. Ante Žigman is primarily an economist.