UPPER HOUSE SUPPORTS REPORT ON BUDGET EXECUTION

( Editorial: --> 4014 ) ZAGREB, Sept 29 (Hina) - The Parliament House of Counties on Tuesday supported the Government Report on the Execution of the State Budget in the First Half of 1998. The state budget revenue in the first half of this year amounts to about US$3.7 billion, which is 52.19 per cent of the estimated revenue. The total expenditure amounts to US$3.7 billion, Deputy Finance Minister Mijo Jukic said presenting the Report. The state is satisfied with the revenue and expenditure, and the fact that the budget in the first half of this year is balanced, said Jukic. The increase of revenue from taxes, especially from the Value Added Tax, has also resulted in a budget revision. The budgetary revision, which was adopted in parliament in July, has increased funds for social welfare (pension and disability insurance, child allowance) as well as for agriculture, reconstruction and housing. A total of US$1.5 billion from VAT had been reaped in the first half of this year, Jukic said noting that the customs revenue has decreased. The favourable situation with the revenue has enabled the reduction of the internal debt. Of Croatia's public debt, which amounts to 27.2 per cent of its Gross National Product (GDP), the internal debt accounts for 10.8 per cent of the GNP. In general, the public debt is decreasing and the level of indebtedness in the past six months was low, while the US$700 million of the country's external debt is being serviced regularly, Jukic said. In a discussion on the Report, MPs said the Government should present a report on the effects of VAT. Opposition representatives expressed dissatisfaction with the current VAT rate of 22 per cent and demanded that it be lowered. The lowering of the VAT rate was out of the question, Deputy Finance Minister Jukic responded. "Thanks to VAT we have managed to cut down the grey economy and set aside more money for the construction of roads, pension and disability funds, health care etc.," Jukic said. MPs also believe there is a need for a comprehensive analysis of the economic situation and that the Government should send to parliament a draft state budget for 1999 as soon as possible. Jukic said that the drawing-up of the draft budget was nearing completion. MPs also requested that clear methods for the allocation of money from budgetary reserves be set. (hina) jn rml/sp 291547 MET sep 98