Prime Minister Andrej Plenković held a press conference today during which he highlighted the key guidelines of the current economic policy, with a particular focus on the upcoming tax reform and measures to mitigate the effects of the energy crisis. The tax reform, which will be presented to the public in a few days, aims to reduce the tax burden on labor, while simultaneously placing greater emphasis on taxing property, which is expected to enable greater fiscal decentralization and encourage local authorities to increase their revenues through this type of taxation. This step is aimed at long-term relief of the labor force, as well as creating a more stable fiscal framework for further development.

Continuation of energy subsidies
The Prime Minister emphasized that the Government will continue to subsidize energy prices, albeit on a smaller scale than before, in order to ensure that citizens still have access to affordable energy. The mentioned reduction in subsidies will be implemented gradually to prevent sharp price increases, especially in the context of the upcoming winter. He stressed that the new package of measures will include subsidies for electricity and gas, with additional focus on the most vulnerable social groups, aiming to protect the most disadvantaged segments of society.

Inflation under control
Plenković proudly noted that the inflation rate in Croatia has fallen to its lowest level in the last three years, confirming the positive effects of the measures introduced by the Government to protect the purchasing power of citizens. Success in controlling inflation was achieved despite turbulent times in the global energy and food markets. The Prime Minister also reminded that economic growth remained stable, with GDP growth of 3.9 percent in the first quarter of this year, further confirming the resilience of the Croatian economy to external shocks.

Tax reform and labor relief
One of the key elements of the tax reform will be reducing the tax burden on labor, with the aim of encouraging employment and increasing net wages of employees. This measure is particularly important for young people and families seeking the opportunity to acquire their own homes, while also aiming to stimulate the demographic recovery of the country. In addition, the reform will allow local self-government units greater maneuvering space to set their own tax rates, which could lead to increased revenues at the local level and reduced surtaxes in some areas.

Sustainable future for energy
Plenković highlighted that future energy projects in Croatia will focus on increasing the share of renewable energy sources, thus reducing dependence on fossil fuels and ensuring long-term energy security for the country. The Prime Minister also emphasized the importance of investing in energy infrastructure, including modernizing the electricity grid and increasing storage capacity for energy, which will enable better energy management in conditions of increased demand.

Political clash with President Milanović
Responding to journalists' questions about recent criticisms from President Zoran Milanović, Plenković reiterated that the President’s claims about the use of military resources for private purposes are completely unfounded. The Prime Minister emphasized that in all cases, the use of helicopters was for official purposes, and accused Milanović of diverting attention from key issues and engaging in political demagoguery. Plenković also reminded of his Government’s successes, including stabilizing the economy, entering the eurozone and Schengen, as well as other infrastructure projects that have significantly improved the standard of living for citizens.

Preparations for the introduction of military service
Regarding the introduction of military service, the Prime Minister highlighted that a detailed plan is being developed, which will be presented after consultations with the Ministry of Defense. It is planned that military service will last eight weeks and include basic military training for young people, which will strengthen the country’s defense capabilities in light of the changed security circumstances in Europe.

Croatia as a regional leader in aviation
Plenković also commented on Serbia’s announcement of purchasing Rafale fighter jets, highlighting that the Croatian squadron will maintain its technological advantage thanks to long-term cooperation with France and NATO. According to the Prime Minister, Croatia will remain a leading air power in the region, ensuring security and stability not only for Croatia but also for the wider Southeast European area.