Zagreb, 17 November 2009 – The Constitutional Court of the Republic of Croatia has ruled that the crisis tax is constitutional, that is, in line with the Article 14 of the Constitution of the Republic of Croatia. The judge rapporteur Mario Jelušić pointed out that the Act protects the principle of the social state because it enables the regular payment of social benefits.

“The aim of the Act is legitimate because it enables the functioning of public finances in the time of economic crisis; the measure is proportionate to that aim, and tax rates do not pose too heavy a burden for their addressees”, said Jelušić and added that the pensioners do not need to worry about the reduction of their pensions and that the Croatian Constitution, unlike the Italian, does not stipulate the progressive tax rate.

Judges Mato Arlović and Ivan Matija said in the discussion that they are against this decision of the Constitutional Court, whereas the President of the Court Jasna Omejec concluded that the Act has objectively passed the constitutionality test even though it contains some “poor solutions and is not perfect”.

The Croatian Government is now obliged to monitor the implementation of this special tax till the end of 2010.

The Court also proposes that the Government explains to the Parliament the need of further existence of the crisis tax as well as the possibility of its cancellation earlier than the foreseen deadline of 31 December 2010.

Let us remind you that the Government started implementing the crisis tax on 1 August, 2 percent for the income from 3,000 to 6,000 kuna and 4 percent to income above 6,000 kuna. Among the first ones to submit the request for the evaluation of the constitutionality of the Act on Special Tax was the Croatian President Stjepan Mesić, and after him more than 80,000 citizens did the same. It seems that the crucial point for the Constitutional Court was the amendment of the Act from September this year which included free professions and craftsmen which were “forgotten” in the original decision of the Prime Minister Jadranka Kosor.