ZAGREB, Nov 22 (Hina) - Croatia's Economy Ministry will initiate the cut of the Value Added Tax to eight (8) percent for basic agricultural produce and foodstuffs, as analyses show that those products are more expansive in Croatia in
comparison to neighbouring countries, Economy Minister Goranko Fizulic announced on Wednesday. This is one of measures to be taken by this ministry so as to slash prices of food products important for the living standard. The ministry's analyses show that a reform in the tax and tariff system would produce impact on "shopping" which Croatians do abroad and which causes the outflow of 12 billion kuna annually. The measures further could lead to the creation of 20,000 new jobs, while the reduced income (in the budget owing to the cut in duties and VAT) would be compensated by an increase in domestic consumption, Fizulic told a news conference. One
ZAGREB, Nov 22 (Hina) - Croatia's Economy Ministry will initiate
the cut of the Value Added Tax to eight (8) percent for basic
agricultural produce and foodstuffs, as analyses show that those
products are more expansive in Croatia in comparison to
neighbouring countries, Economy Minister Goranko Fizulic
announced on Wednesday.
This is one of measures to be taken by this ministry so as to slash
prices of food products important for the living standard. The
ministry's analyses show that a reform in the tax and tariff system
would produce impact on "shopping" which Croatians do abroad and
which causes the outflow of 12 billion kuna annually. The measures
further could lead to the creation of 20,000 new jobs, while the
reduced income (in the budget owing to the cut in duties and VAT)
would be compensated by an increase in domestic consumption,
Fizulic told a news conference.
One interesting fact is that products of Croatian manufactures such
as 'CEDEVITA' (soft drink), 'VEGETA' (spice) or some kinds of baby
food are more expensive in Croatia than in Slovenia or Bosnia-
Herzegovina.
It seems that prices in Croatia are too high as manufactures use
their monopoly owing to the inappropriately high tariff
protection, and the VAT 22-percent rate partly influences this
situation. Croatia's neighbours have the VAT of the 8-percent rate.
That's why the Economy Ministry will suggest to the Finance
Ministry to reduce the current VAT rate to eight percent.
Tariff barriers in the country will have to be lessened with
Croatia's admission into the World Trade Organisation (WTO) in the
end of this month as well.
(hina) ms