How the euro has helped to solve Croatia’s significant grey economy
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Loading... - Chloe Lavoie
- 26 Jan 2023
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The introduction of the euro in Croatia, in addition to the negative ones, could have at least one positive consequence for consumers, namely a drastic increase in the number of service providers that will finally accept cards instead of cash only.
It is well-known that the so-called “grey economy” in Croatia significantly hurts the overall budget of the state. Different ways and methods have been introduced to put a stop to businesses avoiding paying taxes, such as the fiscaliastion of cash registers, a system that is only used in a limited number of countries. This system has certainly helped the tax office, even though loopholes have been found. Businesses in the past would typically illegally pocket 60 percent of cash earnings and pay tax on the remaining 40 percent, and they would avoid card payments.
However, the introduction of the euro could have an effect that wasn’t expected, and effect that could halve the grey economy. In the first two weeks of this year the requests for the rental of “point of sale” devices have increased significantly, according to a report by Jutarnji List. In other words, many businesses are turning towards taking payments via cards or smart methods rather than cash.
According to the report the increase in the number of POS machines has increased by 35 percent since the euro was introduced at the beginning of the year.
"There is an increase in card transactions, as well as the number of users and the number of transactions using the pay application. The increase of new users has increased significantly with the transition to the new currency, so, on average, the number of new users of the application in one day is about 40 percent higher in comparison to the daily number of users before this year. When it comes to transactions, an increase of about 45 percent was observed in the first 15 days," according to Erste Bank. Read More…
