April 7 (SeeNews) - The Croatian parliament said on Tuesday it has given the government the green light to increase this year's borrowing above the 26.8 billion kuna ($3.8 billion/3.5 billion euro) threshold originally set in the 2020 budget bill.
Apart from approving the above budget amendment, at its Tuesday session the parliament also supported the second stimulus package of anti-coronavirus measures adopted by the government earlier in April, the national assembly said in a news release authored by state news agency Hina.
The government said last week that as part of the new measures, it will raise to 4,000 kuna from 3,250 kuna the minimum net wage it is paying out to the employees of troubled companies for the months of April and May. In the first stimulus package adopted in March, the government pledged to pay out 100% of minimum net wages in companies if employers do not lay off workers.
Under the April package, the government is also taking over the payment of social and pension contributions for the increased monthly income, which means a further 1,460 kuna per employee, or an overall 5,460 kuna per employee. Thus, the overall cost of the measure for preserving jobs for March, April and May reaches 8.5 billion kuna.
The new package also frees firms with revenue of less than 7.5 million kuna (93% of all Croatian firms) and a drop of more than 50% in revenue due to the coronavirus crisis, from the need to pay profit tax, income tax or contributions.
In addition, all companies are now able to postpone the payment of value added tax until they receive payment on invoices issued to their counterparties.
The latest measures are complemented by new regulations specifically targeted at supporting agriculture and tourism.
The government adopted its first set of anti-crisis financial measures worth 30 billion kuna ($4.3 billion/3.9 billion euro) in the middle of March, including deferral of payment of income and profit tax, social, health and pension contributions by three months, with an option to be postponed by a further three months. The measures also included interest-free loans to municipalities, cities and counties, as well as to the country's health and pension insurance institutes up to the amount of the due taxes and contributions whose payment has been deferred.
Moreover, state-owned development bank HBOR and commercial banks are ready to freeze and delay loan repayments, as well as to provide financing for working capital and for restructuring of existing loans.
(1 euro = 7.62862 kuna)