CROATIA'S EMPLOYERS COMMENT ON ANNOUNCED CHANGES OF VAT

ZAGREB, Sept 9 (Hina) - The Croatian Association of Employers (HUP) maintains that changes in the system of Value Added Tax (VAT), proposed on Wednesday's session of the committee for strategic decisions of the Presidential Council, would not bring noticeable alterations in the already worrisome situation in the economy. Besides, even negative effects are likely after announcements of other dues and levies and a possible rise in the price of energy products, the HUP said on Thursday. The Committee for Strategic Decisions has voiced confidence that it is necessary to introduce a 0 per cent Value Added Tax rate on bread, milk, books and drugs, and increase taxes on luxury goods. The HUP welcomes moves to take into consideration social problems in Croatia, what is evident from proposals for changing the VAT Act, but the association cannot at all support suggestions for changes of the tax system based exclusively on social and political reasons. This association believes that any change in the VAT system and other financial instruments must recognise the fact that the pressure by taxes has reached a level unbearable for the economy. Those who make political decisions must give clear and precise views on the necessity to reduce the public expenditure and on cutting budgetary expanses. Only after such framework is defined they could begin serious talks on corrections in the tax system. (hina) jn ms