A more just distribution will be achieved by increasing the amount of untaxable income, Sanader said at the fifth round-table debate with the government which was organised by Economist Conferences.
Speaking of the tax reform and changes to income and profit taxes, the PM said the government was absolutely in favour of social partnership, and that creative dialogue with the social partners -- trade unions and employers -- did exist.
Sanader added that after agreeing the principles of the tax reform, the government would discuss them with the social partners before presenting them to the public. He called for disregarding media speculation as to the amounts of income tax rates.
The PM announced further activities aimed at raising financial discipline as well a higher transparence of and stronger tax control. He said the government wanted to achieve a balance in social benefits but not by cutting social rights.
Sanader reiterated the principal objectives of Croatia's economic policy were economic growth, higher living standards, the continuation of reforms, and stronger institutions.
He underlined the importance of reforming the judiciary, the education system, and public administration.
Sanader said the restructuring of public administration was underway and that the government would propose a reform soon.
He reiterated the fiscal and macroeconomic programme until 2007 envisaged an annual economic growth rate of four to five percent, adding that according to projections the growth rate in 2005 would most likely be 4.1 percent.
Sanader said such growth rates would be generated by investments in capital infrastructure and fiscal adjustments leading to a reduction of the national deficit.
He went on to say that investments in capital infrastructure would amount to 14 billion kuna annually, adding that Croatia would continue to invest in roads and the power supply sector.
The PM underlined the importance of investing in ecology projects, saying the government would support investments in the telecommunications network and the building of a broadband network.
Sanader said privatisations would be intensified, and stressed the government strongly supported the stability of prices and the exchange rate of the national currency.
The round-table debate pooled many economy experts, business people and representatives of the executive and legislative authorities.
(EUR1 = 7.4 kuna)