January 11 (SeeNews) - Croatia's government said on Thursday it adopted a regulation to cut tax on new car purchases, under which tax will be scrapped entirely for new cars priced at below 150,000 kuna ($24,200/20,100 euro) including Value Added Tax.
The tax cut aims to stir the car market, improve environment protection and increase safety in road traffic, finance minister Zdravko Maric said during a government meeting, according to a video file posted on the government website.
The tax burden for all new cars will decrease by an average 32%, according to the government's projections, Maric noted.
He noted that Croatia's annual tax revenue will fall by 350 million kuna as a result of the tax cut but the drop is expected to be offset by the strengthening of economic activity in this sector.
According to local media reports, cars priced at above 150,000 kuna to 200,000 kuna will be subject to 2,000 kuna in tax, while those priced between 200,000 kuna and 250,000 kuna will be subject to 4,500 kuna, and those above 600,000 kuna to 60,000 kuna in tax.
(1 euro=7.46189 kuna)