ZAGREB, May 23 (Hina) - The Government's packet of measures as amendments to tax laws is a group of comprehensive and long-term measures orientated towards development. They would reduce labour expenses by 3.31 per cent, that is,
decrease the price of labour and increase the financial power of companies. The measures should be regarded as a whole, because the increase of excise taxes (for oil products, coffee, beer, alcohol and tobacco products) is only one less important aspect of the suggested measures. Because excise taxes will increase, there is no need for a rise in prices of other products, Finance Minister Mato Crkvenac said Tuesday. The measures, forwarded by the Government into urgent parliamentary procedure, are directed towards the opening of new job opportunities, increasing the development power of companies and their liquidity and competitiveness. They will h
ZAGREB, May 23 (Hina) - The Government's packet of measures as
amendments to tax laws is a group of comprehensive and long-term
measures orientated towards development.
They would reduce labour expenses by 3.31 per cent, that is,
decrease the price of labour and increase the financial power of
companies.
The measures should be regarded as a whole, because the increase of
excise taxes (for oil products, coffee, beer, alcohol and tobacco
products) is only one less important aspect of the suggested
measures. Because excise taxes will increase, there is no need for a
rise in prices of other products, Finance Minister Mato Crkvenac
said Tuesday.
The measures, forwarded by the Government into urgent
parliamentary procedure, are directed towards the opening of new
job opportunities, increasing the development power of companies
and their liquidity and competitiveness. They will have a positive
social aspect and will function developmentally and
stabilisationally, Crkvenac told Tuesday's news conference.
The Finance Ministry carried out simulations on ten companies
comparing the effect of the increase of excise taxes for oil
products and the reduction of the contributions on salaries (by two
per cent for health and pension insurance each). The study showed
that labour price was decreased and the companies' possibilities
increased.
Simulation with two companies (with 2,000 and 577 employees)
dealing with transport, shows that the prices of oil products are to
be increased by about 13 per cent, and the labour price decreased by
3.31 per cent.
However, the overall expenditure of these companies are increasing
by 1.81 per cent, or 0.49 per cent, which means there should be no
increase in the price of their services, Crkvenac said.
He announced that all those who will seek to increase their prices
will be resolutely stopped from doing so, by the financial police
and tax administration.
"There is no reason for the price of goods to rise, there is, in
fact, a possibility for it to decrease, and companies yield a
profit," Crkvenac asserted.
He stressed that when the measures were being drafted,
international opinions had not been taken into consideration.
"The motioned measures are consolidating Croatia's position in
negotiations with the International Monetary Fund and World Bank.
We did not take this into consideration, but this is a side effect,"
he said.
In the number of measures being prepared at the Ministry fiscal
policies orientated towards unburdening the economy should
influence monetary policy and lead towards the curbing of interest
rates.
The budget for the year 2001-2003 is being prepared, and the total
public expenditure would grow at a slower rate than that of the
gross domestic product.
A social pact was also suggested, and along with the Government,
unions and employers, Crkvenac suggested that the unemployed be
included in the pact.
Crkvenac announced that during June bonds will probably be placed
onto the Japanese market.
The bonds would amount to between US$250 and 300 million, for seven
years, and the conditions offered are exceptional, he assessed.
These funds would be used to refinance old debts, he recalled.
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