Addressing a conference of Croatian entrepreneurs in Zagreb on Monday, Mesic said that effects of tax reform should be carefully considered, regarding proposals that a flat tax rate should be introduced.
The introduction of a flat tax rate would additionally limit possibilities for pursuing a fiscal policy, and under such conditions Croatia could not carry out an efficient economic policy, the head of state said.
Common goals of the tax reform should be the reduction of tax burdens and an increase from the capital and extra-profits as well as the better supervision of public debt and a cut in the budgetary deficit, he added.
Commenting on the other group of proposals made by the Croatian Employers' Association (HUP) regarding the flexibility of labour market, Mesic said that he agreed that it was necessary to make this market more flexible.
He, however, warned that the process of privatisation had closed down about 350,000 jobs and that a large majority of new workers were offered contracts on temporary employment.
In addition, 60 percent of 300,00 unemployed Croatians have been on the dole for a long time, he said.
Mesic added that proposals about changes in the tax system and for more flexible labour market are just partial segments and that the country needed a package of reform measures which would step up the economic development, reduce unemployment and strengthen social cohesion.
The entrepreneurs' conference in Zagreb, organised by the HUP association, will address HUP's suggestions about making the labour market more flexible and changing the tax system.