CRO LOWER HOUSE DEBATES CHANGES TO TAX LAWS

ZAGREB, Dec 9 (Hina) - The Croatian parliament's House of Representatives on Wednesday discussed changes proposed for the Law on Income Tax. These changes would raise the income's non- taxable part from US$129 to US$161, and would progressively increase deductions for children. The Lower House also discussed changes to the Law on Value Added Tax (VAT). These would extend the accounting period to 30 days, from the present 15, and would increase the annual census for entering the VAT system from US$8,064 to US$12,096. In the changes to the VAT law debate, Mato Arlovic of the Social Democratic Party said the uniform VAT rate of 22 percent was unsustainable. He believed it should be dropped to 17 percent, that a six percent rate should be introduced for certain industry branches, and eliminated for some others. Arlovic's party colleague Marin Jurjevic said the government's changes were good but insufficient. Srecko Bijelic of the Croatian People's Party requested that by Friday the government discuss what had been motioned and come up with new, more effective solutions which would acknowledge both a decrease and the introduction of various VAT rates. Tax Authority administrator Mato Perkovic pointed out that any changes to the VAT rate would bring into question the draft state budget for 1999, and thereby the already planned salaries. (hina) ha jn