SABOR ANNULS VAT ON FOREIGN TOURISTS' ORGANISED ACCOMMODATION

ZAGREB, July 14 (Hina) - Organised arrivals of foreign tourists, namely the payment in foreign currencies by foreign tour operators, will be exempt from paying the Value Added Tax (VAT) as of 1 January, 2001, said Croatian Finance and Tourism Ministers Mato Crkvenac and Pave Zupan Ruskovic on Friday. On late Thursday night the Croatian national parliament adopted such amendments to the VAT Act and the costs of this measure for the budget would be 250-300 kuna (approximately 70 million German marks), Finance Minister Crkvenac told a news conference. "This is the last correction in the VAT system which can be accepted at the current level of development," Finance Minister said adding that he abode by the statement that the 22-percent VAT rate could not be cut now. Describing the aforementioned correction as "the first positive thing that was made for tourism in the last 10 years," Tourism Minister Zupan Ruskovic said prices in tourism services would not increase for the next season. The VAT exemption for foreign tourists' organised accommodation will help extend tourist season, she added. In addition, the VAT zero rate will make an impact on cutting prices in pre-season and post-season tourism, Zupan Ruskovic said. (hina) mm ms