MINISTERS WELCOME GOVERNMENT DECISION ON REDUCING VAT RATE

ZAGREB, Sept 9 (Hina)- Croatia's Agriculture Minister Ivan Djurkic, Culture Minister Bozo Biskupic, and Health Minister Zeljko Reiner on Wednesday welcomed the Government's proposal on introducing a 0 per cent Value Added Tax rate on bread, milk, books, and drugs. Speaking in Croatian Television's news broadcast 'Motrista' last night, Djurkic said the Government would also reconsider VAT rates on certain production materials which are necessary for the production of finished food products. The zero VAT rate on books will be of great help to the Croatian publishing sector which is in a difficult situation due to a small market and a small number of copies, a bookshop network which was completely destroyed during the Homeland War and a poor distribution system. The current VAT has also burdened consumer prices, Biskupic said. Health Minister Zeljko Reiner expressed hope that the 0 per cent rate would not include only those medicines which are on the list of the Croatian Health Insurance Institute but also medical products. This will significantly improve the level of supply in pharmacies and hospitals, Reiner added. The introduction of the zero rate should result in price cuts for medicines, decreasing them by 22 per cent, which is the current VAT rate. (hina) rml