LOWER HOUSE DISCUSSES AMENDMENTS TO VAT LAW

( Editorial: --> 8082 ) ZAGREB, Jan 29 (Hina) - The Croatian National Parliament's House of Representatives Thursday discussed two bills on changes and amendments to the law on value added tax. One bill was proposed by representatives of the Croatian Democratic Party (SDP), the other by the Croatian Peasant Party (HSS). Without disputing the necessity of introducing VAT, both bills pointed out the negative effects of the 22 per cent uniform rate and proposed the introduction of graduated rates. Representatives of the SDP proposed the introduction of a 15 per cent general rate, a six per cent reduced rate and a zero rate, while HSS representatives proposed a 20 per cent general rate, a ten per cent reduced rate, and a zero rate. The reduced rate would, according to both bills, tax agriculture, food products and power supply for housing, tourism and construction. The SDP and the HSS proposed a zero rate for basic food products, children's clothing, medicine, books, newspapers, invalid aid devices, and services of educational, health and cultural institutions. Representatives of the SDP pointed out the current 22 per cent rate placed additional burden on the socially endangered part of the population, increased the prices of investments and increased illiquidity. Representatives of the HSS estimate that in case their bill is adopted, budgetary revenues would be cut for DM 714 million. They see a possible substitution for this amount in the introduction of capital gain tax, changes in the expenditure tax system, and the introduction of progressive income taxation. (hina) ha jn 291644 MET jan 98