Nedo Pinezić: State interference in market relations is not appropriate in a democratic society

first_imgREVIEW OF THE PUBLICLY PUBLISHED BILL ON AMENDMENTS TO THE CATERING ACTIVITY LAW – APPENDIX TO THE PUBLIC HEARINGThe rationale for amending the Act is based on gossip.The assessment made on the operation of household facilities according to the standards of more than 20 years ago and that they need to be changed in terms of competitiveness and market uniformity is arbitrary, flat, unsupported by the findings of the actual situation. Also, one Ministry of Tourism hereby assumes the role of market arbiter for which it has no authority or competence. Such encroachment on the free market is comparable to the system of contract economy from non-market times.State interference in market relations is not appropriate in a democratic societyIn all tourist developed countries, only the minimum technical conditions are legally determined, and marketing methods are constantly used to research the market and shape the offer. This is another relic of non-market activity and it is by no means acceptable to legally prescribe marketing methods. Making free estimates and untrue claims without a single piece of evidenceThe introduction does not mention the number of boarding houses in Croatia. How many of that number of boarding houses violate legal provisions in any way and represent unfair competition to small hotels? Where and to what extent were these irregularities observed and how were they sanctioned? What did the Tourist Inspectorate do in this regard, and what measures could it not take due to the lack of legislation? Furthermore, the allegation that these are the same boarding services in the household and companies and crafts is incorrect. Pension in the household can provide food service ONLY FOR ITS GUESTS AT THE ACCOMMODATION.It is also incorrect to claim that most households have a maximum capacity of 20 basic beds. By a simple calculation of dividing the total number of basic beds (600.000) by the number of registered households (90.000), a completely different result is obtained – an average of 6,66 beds per household. The claim that the level of service in the boarding house in the household is the same as in the hotel is also untrue. Namely, if that were the case, then we should be seriously concerned about the level of service in the hotel. The boarding house is a simple facility with limited comfort, without the possibility of providing “a la carte” service, which in most cases provides a basic breakfast and dinner service based on the daily menu (single course).It is also untrue that boarding houses do not pay VAT because by exceeding the limit of HRK 300.000 of income they automatically enter the VAT system, have to keep business books, have to have a fiscal cash register, etc. Equally, boarding houses are subject to HACCP measures, sanitary inspections etc., in fact, this also applies to the provision of breakfast services in the household. As for inspections and other charges, it is extremely inappropriate to justify their existence to small hotels by the fact that they are registered as hotels, if in nature they provide a small-scale service such as household boarding, as the legislator says.On the contrary, small hotels should have far more favorable business conditions than the existing ones, which will not happen as a consequence of the abolition of “unfair competition” – boarding houses. The Croatian Chamber of Commerce has already pointed out the need to equalize the business conditions of all micro-entrepreneurs up to an annual income of HRK 1.000.000 according to the model that is most favorable for the one to whom these conditions apply. Such a solution does not benefit anyone, especially small hotels, which still have over-regulated business conditions.The strategy for the development of Croatian tourism until 2020 needs a thorough revisionAt the moment, the mentioned Strategy is an unreliable document that did not take into account global trends in tourism, which planned to increase hotel capacities, without projecting a labor crisis affecting the Croatian hotel sector. It also did not take into account the pronounced seasonality of larger hotel systems in smaller tourist resorts on the coast and in rural areas that operate in nature from Easter to All Saints, and increasingly only from May to November. Therefore, any reference to the Strategy is a path to the past. These measures will not change the attractiveness of investing in hotel facilities because so far such investments have been privileged, and family accommodation in no case can provide a level of hotel service and can not compete with hotels in the same market niche. Suspicion of an attempt to eliminate competition to a particular person through legal solutionsMaking a free assessment of an unnamed person that, according to the existing legal provisions, the possibility of condominiums of large buildings that are converted into several boarding houses in the household, and are presented as hotels, is abused – is not serious at all.For such a claim, which is the basis for the abolition of the type of services, it is necessary to elaborate and argue the volume of such a phenomenon, the findings of the Tourist Inspectorate, explain the measures taken and obstacles to taking appropriate sanctions. Such an argument is indeed inappropriate and raises the suspicion of abuse of position and authority for the purpose of favoring an unknown person who initiated the ban on boarding houses in order to eliminate competition in their business environment. The proposed solutions for existing boarding houses in the household can be interpreted in the same way, among which the first option is to give up the provision of this service. Possible consequences of the abolition of the possibility of providing board and half board services in the household through the correction of Article 30 in item 3, are further emigration of people from rural areas of Croatia. Especially from Gorski kotar, Lika, Slavonia…Encouraging investment in the construction of rental apartmentsDeletion of Article 33, which stipulates that the stay of more than 15 persons who are not members of the immediate family in accordance with a special regulation prescribing the obligation to pay the sojourn tax, in apartments, suites and holiday homes, in tourist places from 15 June to 15 September , considers the provision of catering services in the household, and the allegation “that the said presumption did not give the expected results, because citizens, owners of these properties, did not report more than 15 people, nor close family members, who stayed with them, except cases, in order not to apply the above provision of the law to them, due to the possible non-registration of all persons who stayed with them without charging for the service, the consequence is the non-payment of the residence tax for those persons; it is assessed that the supervision over the registration of guests and the collection of the sojourn tax can be ensured in other ways prescribed by law, and the question of the justification of the provision related to the protection of property rights is raised “; – they open the door wide to the gray tourist market and apartmentization.By deleting this article, tourist traffic in non-commercial facilities is no longer illegal and the legislator himself distances himself from any possible control by stating “the question of the justification of the provision related to the protection of property rights” arises.The decision on the work permit should be separated from the categorizationAn application for a decision on approval for the provision of catering services in the household is not required, but possibly an application for determining the category of accommodation (stars). All the more so because: (5) Renters referred to in paragraph 1 of this Article who do not apply for the decision referred to in paragraph 1 of this Article, continue to provide catering services, but lose the right to display the category label (stars) on the facility where they provide catering services and in promotional materials.Nedo Pinezić, provider of catering services in the household / www.nedopinezic.comRelated news: BILL ON AMENDMENTS TO THE LAW ON CATERING ACTIVITY PUBLISHED. GET INVOLVED!* The views expressed in the columns are the personal views of the authors and do not necessarily reflect the views of the editorial staff of the portallast_img

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