CROATIAN PEASANT PARTY WON'T SUPPORT REDUCING VAT

ZAGREB, Jan 5 (Hina) - Croatian Peasant Party (HSS) MPs will not endorse the new government's proposal to reduce VAT from 22 to 20 percent because they feel it is harmful for Croatia at this moment, HSS leader Zlatko Tomcic said on Monday.#L# The proposed cut will deprive the national budget revenue of more than three billion kuna, without bringing positive effects, and will benefit only the trade, not consumers, Tomcic told reporters in a break of an HSS Presidency session. He said the proposal does not outline alternative sources of revenue to make up for the losses in the budget. Tomcic recalled the HSS tax policy, which envisages keeping the 22 percent VAT rate, introducing an 11 percent rate for the food-processing industry and some segments of tourism, and expanding the number of items free of VAT. The resulting deficit would be compensated by raising excise on some goods. Asked if the HSS Presidency had discussed the party's poor results at parliamentary elections in November, Tomcic said the matter would be addressed later this month, after regional branches outlined concrete programmes. (Hina) ha