CROATIAN UNIONISTS REACT CAUTIOUSLY TO ANNOUNCED CHANGES OF VAT

ZAGREB, Sept 9 (Hina) - Representatives of Croatian trade unions on Thursday expressed their reservations about the effect of a possible introduction of a zero (0) rate of the Value Added Tax (VAT) on some products. Unionists described this proposal of the Committee for Strategic Decisions of the Presidential Council as a pre-election move made by the ruling party. The Committee for Strategic Decisions on Wednesday proposed the introduction of the 0 rate of the VAT on bread, milk, medicines and books as well as an increase of the tax on luxury goods. The Association of Workers' Unions of Croatia (URSH) however supported the Committee's recommendation, said URSH President Boris Kunst. But if the price of oil is to climb we shall achieve nothing, Kunst said. According to him, the entire tax system should be changed and the public expenditure cut. A leader of the Association of Croatian Independent Trade Unions (SSSH), Vitomir Begovic, expressed a similar opinion and added that the right place for a discussion on alterations of the VAT should be the Economic and Social Council which includes representatives of the Government, employers and labour unions. The President of the Croatian Federation of Unions (HUS) Zdenko Mucnjak maintained that it would not be possible to reduce the VAT without cuts in the public expenditure. The President of Independent Croatian Unions (NHS), Kresimir Sever, described the announcement of introducing a zero rate of the VAT as a good move if other sources for ensuring money in the state budget, health and pension funds can be found. A leader of the association of Croatian unions of public servants, Vilim Ribic, said economics proved that it was correct to have the tax system with a single rte. The existence of a few rates in most European developed countries is the decision made by politicians rather than economists, Ribic added. (hina) jn ms