GOVT, EMPLOYERS AND UNIONS DISAGREE OVER DRAFT BUDGET

ZAGREB, Nov 30 (Hina) - Representatives of the Croatian Government, employers' unions and trade unions on Monday failed to reach an agreement on the draft budget for 1999, at a session of the Economic and Social Council (GSV). The Government believes that the draft budget is realistic, while employers believe that it does not take into account the principles of saving, development and social security. The third party - the unions - have doubts as to whether the budgetary revenue could be realised. The alleviation of tax burden, as proposed by the draft budget, will not make the economy more competitive, said Zeljko Ivancevic, head of the Croatian Employers' Association. The increase of the non-taxable part of the salary and personal deductions and the extension of the deadline for the payment of Value Added Tax (VAT) to 30 days will secure the alleviating of tax burdens of mere 1.22 per cent of Gross National Product. Employers are in reality paying a VAT rate of 26-27 per cent because in order to be able to pay it, they have to take loans, Ivancevic said. "All those who are planning a rise of salaries in economy for the next year have calculated it wrong, because a large number of companies will join those who are not able to pay salaries as early as January", Ivancevic said. It is also questionable how the budget will be filled because more and more companies are blocked and are paying neither taxes nor contributions. Labour and Social Welfare Minister Joso Skara stated that the next session of the GSV should discuss ways to help the Pension Fund in securing its regular operating - either through increasing the contribution rate or through taxes. Union representatives, who also agreed that it would not be possible to realise the budgetary revenue, were told by Economy Minister Nenad Porges that the revenue was indeed optimistic and on the border of implementability, but he believed it was realistic. (hina) mm rml ab