The proposal of the Finance Minister is the increase of the nontaxable part from the current 1,500 kuna to 1,600, while unionists insist that it should be equivalent to the amount of the minimum salary under collective agreements, namely 1,951 kuna for this year, and some 2,080 kuna for next year.
Suker said the proposal of the trade unions would cost the state budget 2.9 billion kuna.
He went on to say that contributions were the heaviest burden on salaries given that the average salary of some 4,000 kuna had so far entailed contributions equivalent to 89 percent of that amount.
Commenting on reasons for the annulment of the tax on dividends, Suker said his ministry had opted for this move as it believed it could stimulate investors and consequently create more jobs.
The proposal for the annulment of taxes on dividends elicited different reactions from the other two partners in the GSV. While employers welcomed this, trade union federations' representatives said only employers would benefit from this change.
"The draft tax reform is more favourable to employers than workers," the head of the URSH trade union federation, Boris Kunst said. He added that the trade union federations had harmonised their views and were ready to exert some pressure on the government as soon as they received a clear answer of the government on the said topics.
The Croatian Employers' Association (HUP) director, Djuro Popijac, said the government had done all what was possible for reaching compromise between the development and soocial components in the tax reform.
He only expressed some reservations about the government's decision to retain the 45-percent tax rate on the highest salaries.