Researchers from the Institute of Public Finance held a meeting with OECD representatives on 18 February 2025 to discuss key challenges in public finance, with a focus on public healthcare, tax policy, state asset management, and the fiscal implications of natural disasters.

One of the topics discussed was tax reform, with particular emphasis on the short-term rental tax, which applies to properties that are not used for permanent residence or long-term rental. This measure is expected to contribute to better fiscal balance and ensure fairer taxation in the real estate sector. Given the potential impact of tax changes on the market, it is advisable to conduct detailed analyses of their fiscal and redistributive effects before introducing new taxes. If such assessments have already been conducted, transparently publishing the results would enhance understanding and predictability of the reform. The stability of the tax system is a crucial factor in fostering a favourable investment environment, so reducing the frequency of changes is recommended to ensure greater predictability for businesses and citizens.

The discussion also covered public healthcare financing, highlighting that acute care in Croatia is the dominant – and the most expensive – form of healthcare. Expanding alternative care options, such as long-term care, palliative care, and hospices, could help relieve the burden on hospitals, enable more efficient management of healthcare expenditures, and improve access to services for patients who do not necessarily require acute care.

Finally, the meeting addressed the impact of natural disasters on public finances, emphasizing the need to integrate these risks into fiscal strategies. Natural disasters, like earthquakes and floods, can significantly increase fiscal pressure through unexpected expenditures for damage repair and infrastructure restoration. The Institute stressed the importance of systematically assessing natural disaster risks and incorporating them more effectively into budget planning. Developing models to forecast the financial consequences of such events and improving the management of state non-financial assets could contribute to long-term fiscal sustainability. A transparent inventory of state non-financial assets would enable more efficient management and better planning of infrastructure projects, including investments in climate adaptation measures, and ultimately help control public expenditures in crisis while improving overall fiscal planning.