LOWER HOUSE BEGINS DISCUSSION ON PROFIT AND INCOME TAXES

ZAGREB, Nov 16 (Hina) - The Croatian National Parliament House of Representatives on Thursday morning began a discussion on bills on income and profit taxes, whose main goal is the unburdening of economy and citizens. A decrease of profit tax from 35 to 25 per cent should stimulate investments and employment, deputy finance minister Damir Kustrak said, explaining the draft. All new employees, new equipment and donations for culture, science, education and charity will enjoy tax relief, he said. Moreover, the introduction of a lesser, fixed protection interest of 3.5 per cent is another new provision, and we are even considering the rescinding of the provision altogether as it does not exist anywhere in the world, and its basic goals are non- existent, Kustrak said. The negative side of the protection income is that in the past six months losses had been incurred by companies, reaching 109 billion kuna (US$12.55 billion). The biggest novelty in the bill was the introduction of three, instead of the one tax tariff, so the taxes would be paid by 15, 25 and 35 per cent. This will reduce tax burden, but at the same time expand the basis for incomes which are taxable, Kustrak concluded. (hina) lml