Financial Crime World

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Croatia’s Tax Burden Reduced: New Project Brings Relief to Small Businesses and Tax Authority

A recent project aimed at simplifying Croatia’s complex tax system has yielded promising results, bringing relief to small and medium-sized enterprises (SMEs) and the Croatian Tax Administration (CTA).

Challenges Facing Croatian Taxpayers

Croatian taxpayers, particularly SMEs, have been struggling with a multitude of tax obligations that often hinder their business operations. The complexity of the tax system and high compliance costs have direct consequences for the CTA and its ability to provide quality services.

  • High compliance costs
  • Complexity of tax system
  • Negative impact on businesses and employees

Measuring the Tax Compliance Burden

To address this issue, the project developed tailored methodologies and surveys based on the Standard Cost Model (SCM) to measure the tax compliance burden on both enterprises and the CTA. The results of these analyses have provided valuable insights into drivers of the tax compliance burden and ways to reduce it.

  • Methodologies for measuring tax compliance burden
  • Surveys based on SCM
  • Identification of drivers of tax compliance burden

Key Findings and Recommendations

The project’s final report has highlighted several key findings, including:

  • Reliable tax compliance cost ratios
  • Improved understanding of drivers of the tax compliance burden on enterprises
  • Improved understanding of drivers of the tax compliance burden on CTA staff
  • Identification of ways to reduce the burden

A Gradual Roll-out of Initiatives Expected

While the project’s findings are a significant step forward, a gradual roll-out of initiatives is expected over the next months and years to achieve the goal of reducing the tax compliance burden on enterprises and the CTA. This will require sustained effort and cooperation from all stakeholders involved.

  • Gradual implementation of recommendations
  • Continued collaboration between stakeholders
  • Future outlook for tax reform in Croatia