ZAGREB, Sept 28 (Hina) - The Croatian Parliament's House of Counties on Tuesday endorsed bills on the introduction of a zero Value Added Tax (VAT) rate on bread, milk, books, and medicines, and increased expenditure taxes on
cigarettes, cars, and luxury products, as motioned by the bench of the ruling Croatian Democratic Union (HDZ). The bills were endorsed by representatives of the HDZ, whereas the opposition said the HDZ bills were a pre-electoral gimmick which will not make the social position of the majority of the population any easier. HDZ's Djuro Njavro disagreed with the opposition's assessment. He said the zero VAT rate on some products was a way of systematically adapting the tax system to society's possibilities, and of making a fairer distribution of the tax burden. The package of bills relative to the VAT and expenditure taxes is realistic at present and will not call for a budget revision, N
ZAGREB, Sept 28 (Hina) - The Croatian Parliament's House of
Counties on Tuesday endorsed bills on the introduction of a zero
Value Added Tax (VAT) rate on bread, milk, books, and medicines, and
increased expenditure taxes on cigarettes, cars, and luxury
products, as motioned by the bench of the ruling Croatian
Democratic Union (HDZ).
The bills were endorsed by representatives of the HDZ, whereas the
opposition said the HDZ bills were a pre-electoral gimmick which
will not make the social position of the majority of the population
any easier.
HDZ's Djuro Njavro disagreed with the opposition's assessment. He
said the zero VAT rate on some products was a way of systematically
adapting the tax system to society's possibilities, and of making a
fairer distribution of the tax burden.
The package of bills relative to the VAT and expenditure taxes is
realistic at present and will not call for a budget revision, Njavro
stressed.
A zero VAT rate on bread, milk, books, and medicines will mean
US$68.5 million less in revenue for the Croatian Health Insurance
Bureau. Njavro explained this will be compensated with higher
expenditure taxes on cigarettes, expensive cars, and luxury
products.
Higher expenditure taxes on cigarettes alone will bring US$13.7
million into the state budget, an additional US$6.16 million will
come from taxes on expensive cars, and US$1.37 million from gold or
diamonds. Budgetary users will also manage to save several dozens
of millions of US dollars, Njavro said, adding the health sector
alone would save around US$41 million.
Most opposition representatives maintain HDZ's bills are a pre-
electoral gimmick. The Croatian Social Liberal Party and the
Liberal Party (LS) pointed to the very difficult situation in the
economy. The average salary is US$402, they said, whereas a four-
member family needs US$363 a month. Also, they reminded, 63.1
percent of the employed receive salaries lower than the average
one, while 169,000 wait for salaries for months.
"This fix won't help at all. Many economic subjects have either
collapsed or are about to," said Ankica Mamic of the LS.
Many opposition representatives advocated a reduced general VAT
rate, and put forward several amendments, among them a zero VAT rate
on orthopaedic aids, medical products, and substitutes for
mother's milk and the like.
After endorsing the HDZ bench bills, the Upper House initiated a
debate on a bill on amendments to the VAT Law motioned by Lower House
representatives of the Social Democratic Party (SDP).
The SDP suggested a VAT rate of 17 percent, the introduction of a
privileged six percent rate on agricultural and food products,
construction, and the power industry, and of a zero rate on basic
groceries, children's clothes and footwear, and else.
The SDP also suggested that the VAT be paid at the most convenient
time for the entrepreneur, namely when he has collected his
claims.
(hina) ha jn