You are now taxing foreign pensioners residing in Croatia. If they are not paying taxes in countries in which they have earned their pensions, then that is perfectly all right. One way or another, taxes must be paid somewhere. However, the rates you are charging are not in the government’s long-term interest, for foreign pensioners are a boon for Croatia. They do not only pay taxes in this country as of late, but they also continue to spend here their pensions earned elsewhere. And they spend foreign money in Croatian cities, towns, and villages of their residence. As they typically reside in the coastal regions, such as Istria and Dalmatia, these regions benefit greatly from their patronage.

Excessive taxes will drive them away, though. Perhaps even worse, they will discourage those who are now planning to spend their retirement in Croatia. In this context, it is good to focus on so-called babyboomers, as those born between 1946 and 1964 are known. That is the largest generation in the history of mankind. And the oldest among them have already retired as of last year. Millions upon millions of them will retire in the next couple of decades. At present, many countries are doing their best to attract them by offering benefits of all sorts, while you are doing your best to repel them by hasty and undue taxation.

You need to review and adjust your policies regarding taxation of foreign pensioners as soon as possible. Croatia has little or nothing to offer by way of economic growth other than tourism and a refuge for foreign pensioners. Agriculture, mining, manufacturing, and services are doing exceedingly poorly in this country. After a boom of about a decade, construction is in the doldrums, as well. In addition to tourism, only commerce seems to be flowering since independence. Every other economic sector is in shambles, and this is how things are likely to remain. Providing a Florida-like environment for the pensioners from abroad would be a safe economic bet, and especially in the moribund coastal regions. Such a policy would pay off for no less than two decades, by when the last babyboomers will have retired. Only remember, you do not have much time left to ponder this attractive option. Some foreign pensioners are already planning to leave Croatia as soon as possible. I am among them, to be sure.