ZAGREB, May 15 (Hina) - Croatia's Finance Minister Mato Crkvenac on Monday did not explicitly decline a possibility of reducing the 22-percent Value Added Tax (VAT) to 19 percent as early as this year but he did not give a clear
answer whether the reduction be done this or next year. It is very difficult to cut the VAT this year, but we shall try to do so as much as possible. Currently we are reconsidering some accounts and we shall seek all possibilities that can lead to the VAT reduction, Crkvenac told reporters. During Monday's multimedia presentation of what the new Government had achieved in the first 100 days since its inauguration Prime Minister Ivica Racan confirmed that the government considered steps to cut the Value Added Tax (VAT) from 22 to 19 rate. "Yes, we are thinking about it, and the definite answer is possible at the coming session of the Governmen
ZAGREB, May 15 (Hina) - Croatia's Finance Minister Mato Crkvenac on
Monday did not explicitly decline a possibility of reducing the 22-
percent Value Added Tax (VAT) to 19 percent as early as this year but
he did not give a clear answer whether the reduction be done this or
next year.
It is very difficult to cut the VAT this year, but we shall try to do
so as much as possible. Currently we are reconsidering some
accounts and we shall seek all possibilities that can lead to the
VAT reduction, Crkvenac told reporters.
During Monday's multimedia presentation of what the new Government
had achieved in the first 100 days since its inauguration Prime
Minister Ivica Racan confirmed that the government considered
steps to cut the Value Added Tax (VAT) from 22 to 19 rate. "Yes, we
are thinking about it, and the definite answer is possible at the
coming session of the Government on Thursday," Premier added.
After the promotion the Finance Minister Crkvenac recalled that
during the run-up to the January election the incumbent ruling
coalition had promised to decrease the VAT gradually to 17 percent.
In the first stage, the VAT should be cut by two or three percent.
But this must be done within possibilities offered by the entire
state budget, as the 2-3 percent cut means the lessening of the
budget revenue by two or three billion kuna. This can be conducted
only after the inflow of means be ensured according to another
bases, Crkvenac said.
Asked whether tourism can expect the zero rate of the VAT, he
replied that chances for this were nil.
Asked to comment on how the VAT reduction and the tax policy's
changes can impact the relations between Zagreb and the
International Monetary Fund (IMF), Crkvenac answered that Croatia
was carrying out its independent fiscal policy.
"The IMF has assessed that tax policy quite positively. We do not
expect that changes that may ensure in the tax system would raise
anybody's suspicions," he said.
Finance Minister added that projections of a budget for 2001-2003
were being drafted and they count on the reduction of the
government's part in the total expenditure. The budget is being
planned on the possible 4-6 percent growth in the Gross Domestic
Product in next three years, and the budgetary expenditure should
rise in slower manner than it, he explained.
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