The revised budget and the proposed measures, which are expected to yield long-term results, will be discussed by IMF officials and a Finance Ministry delegation, which travels to Washington on Sunday.
The budget revision and the proposed measures were discussed today by the government leadership and by the leadership of the Croatian Democratic Union.
The revised budget is aimed at reducing material expenses by 437 million kuna, government subsidies are expected to be cut by 140 million kuna, and other types of government assistance and subsidies will be reduced by around 400 million, which totals around one billion kuna.
These funds would be reallocated for pensions (470 million), salaries (313 million), other payments (120 million) and government incentives for citizens saving to take a housing loan (80 million).
The Ministry has said that given the improved tax collection there is no need to introduce new or increase the existing taxes.
What is being considered is the abolishment of zero VAT rate for organised tourist arrivals, which would be replaced by a graduated VAT rate, to be introduced at the beginning of next year.
The proposed measures that are expected to yield long-term results and that will be discussed by Croatian and IMF officials refer to amending laws on health insurance, government-subsidised saving for housing purposes and government incentives, to amending the Employment Action Plan, and to pensions.
(1 euro = 7.3 kuna)