The competitiveness of a tourist destination is the ability of the destination to effectively use all the resources at its disposal to ensure the development and the offer of quality, innovative, ethical and attractive products and services in tourism. VAT rates for accommodation and catering services in Croatia are higher than in European countries competing in tourism. As many as 18 out of 28 countries apply a rate of less than 10%, while Croatia applies a rate of 13% and is therefore not competitive. The VAT rate of 25% on non-board catering services is absolutely the highest in the Mediterranean and among the highest in the European Union. This creates non-competitive business conditions in the business environment. Regarding the contributions from salaries, it is the biggest problem of Croatia in terms of the tax burden on labor. In comparison to Italy and France, Croatia has a simpler way of calculating the annual income tax rate. Prices for the sojourn tax for adults in the European Union range from a minimum of 0.10 euros (the lowest price in Bulgaria) to a maximum of 7.50 euros (the highest rate in Belgium) per person per night. In the tax reform of 1.1. this year, with regard to the Value Added Tax Act, the general rate of 25% has been maintained and the coverage rate has been extended to 13%. Due to the decline in economic activity caused by the Covid 19 virus, the Ministry of Tourism reduced the flat tourist tax by 50%, abolished the tax for extra beds and postponed the obligation to recategorize accommodation.