The two per cent crisis tax on incomes ranging from 3,000 to 6,000 kuna will be abolished as of July 1 this year, Prime Minister Jadranka Kosor announced at a government session on Thursday.
"We want it to give additional stimulus to spending and to boost optimism in the country which we all need," Kosor said.
She thanked all citizens for showing their understanding at the time when the government made "the tough decision" to impose the crisis tax.
Kosor said she believed the decision to abolish the two per cent tax would be well received by business people and the Croatian Employers' Association.
The PM said that the government would continue to carry out its programme consistently, again highlighting the three main pillars of its work -- aid to the economic sector, an uncompromising fight against corruption, and completion of EU membership negotiations so that Croatia could sign an accession treaty early next year.
The law on special tax on salaries, pensions and other receipts, imposed last summer as part of austerity measures to counter the economic crisis, introduced two tax rates -- two per cent on incomes raging from 3,000 to 6,000 kuna and four per cent on incomes exceeding 6,000 kuna. The tax is calculated on the entire income.