POSITIVE EFFECTS OF VAT HAVE NOT YET REACHED CONSUMERS

( Editorial: --> 2896 ) ZAGREB, Feb 18 (Hina) - In its first report to the Croatian government about the movement of prices following the introduction of Value Added Tax (VAT), the Commission for the Protection of Consumers assessed that the positive effects of VAT in general have not reflected on product prices in shops. For most observed products consumers pay higher prices than justified. Therefore, the Commission will propose that the government introduces a law on the protection of consumers, which some countries in transition already have. Between 1 January - when VAT was introduced - and 5 February, the Commission followed prices of 64 products and services in 21 towns in Croatia. The Commission followed prices of food products, meat, clothing and footwear, household appliances and furniture, personal services and transport services, children's food and medicine as well as catering and municipal services. The Commission paid most attention to results of a special program devised by the Government, producers and traders, concerning the price of bread, milk, oil and sugar. The report states that the program works best for fresh milk and sugar. At 50 per cent of retail outlets, oil costs the same or less than before the introduction of VAT. With other retailers it costs more. At just under 50 per cent of retail outlets, the price of half- white bread has increased. (hina) jn mrb 181741 MET feb 98