Prime Minister Zoran Milanovic said in Parliament on Wednesday morning that criticisms that the proposed real estate tax would further burden citizens were unfounded.
"This is not a tax on residential property or on the middle class or on those people who took years to build their holiday houses", he said.
"The primary aim is not to introduce a tax that exists in all EU countries, but to bring in some order and transparency", he said responding to queries put forward by MPs during Question Time in Parliament.
He stressed that property where people live would not be taxed.
Martina Dalic of the strongest opposition party, the Croatian Democratic Union (HDZ), claimed that the new tax would certainly lead to economic decline and halt reconstruction or construction of new real estate, leaving construction workers without jobs.
Milanovic added that the time had come for complicated and unpopular but vital decisions, in response to claims by HDZ chief Tomislav Karamarko that the economic situation in Croatia was just getting worse and citizens were being impoverished.
Milanovic argued that the budget deficit had been reduced from 15 billion kuna last year to 10 billion this year and even though this may not be interesting to Croatian citizens it was vital to the country's financial stability.
He explained that the country was facing an alarming situation because public spending was constantly on the rise whereas economic growth was not keeping in step, which called for unpopular decisions.
