DEARER FOOD PRICES FOLLOWING VAT UNJUSTIFIED - COMMISSION

( Editorial: --> 6456 ) ZAGREB, 22 Jan (Hina) - The Consumer Support Commission, which the Croatian Government formed to monitor price changes following the introduction of Value Added Tax (VAT), assessed on Thursday that food had become dearer more than was justified. At the same time the prices of products, which were expected to become cheaper following the introduction of VAT, were not lowered as much as they should have been. The new taxation system in Croatia came into force on 1 January 1998. The turnover tax on goods of 15 per cent and the turnover tax on services of 10 per cent were replaced with the VAT at the flat rate of 22 per cent. Assistant Finance Minister and Commission chairwoman Martina Dalic told a press conference in Zagreb that the Commission expected food prices not to increase more than two per cent on average, while the prices of other products should fall in the range of four to 15 per cent. Reminding that the whole facts would be released by the State Statistics Bureau, Dalic presented journalists with Finance Ministry data obtained while following food prices in two stores in Zagreb. According to the information, food prices in Zagreb on 22 January were 5.8 per cent higher than on 1 December last year. The greatest increase, 7.04 per cent, was recorded on 15 January, Dalic said. The Commission concluded that no one in the chain of production and trade and services turnover had passed on to consumers even one positive effect of the introduction of VAT. (Hina) jn mb 221950 MET jan 98