CRO FINANCE MINISTRY WON'T ABANDON UNIFORM VALUE ADDED TAX RATE

ZAGREB, Aug 30 (Hina) - The Croatian Finance Ministry will not give up a uniform Value Added Tax rate, Deputy Finance Minister Mijo Jukic told a session of the Economic Social Council in Zagreb on Monday, adding it was a matter of agreement what it would amount to. Responding to trade unions' representatives' repeated demands for changes to the tax system, Jukic said the Finance Ministry would persevere by its strategy of a uniform VAT rate because, he added, it was the foundation of a modern tax system which had been commanded by many European experts. "To touch into the VAT would be suicidal for Croatia's public finances," Jukic asserted, pointing out state finances are well and balanced following a revision of the state budget earlier this year. We can implement tax relieving once we agree on reduced expenditure, Jukic said. Employers reiterated this year's rises of five and 12 percent in salaries in public and state services were unsustainable considering economy's possibilities. The trade union of public services reminded however that salaries in economy were rising by 17 percent. They also pointed to the importance education, health, and science and technology have on the entire society. Today's session also discussed the current state of affairs in Croatian economy. Representatives of trade unions and employers and those of the government again differently assessed the economic and social situation in the country. Unionists and employers pointed out the situation was alarming. They presented data on drops in industry, export, investments, and personal consumption, and increased state expenditure, unemployment, and external debt. Economy Minister Nenad Porges countered by saying the situation was not dramatic, but "serious and complex." The Economic Social Council will resume the session next week. (hina) ha jn