CRO COUNCIL OF DEFENSE, NATIONAL SECURITY DISCUSSES TAX POLICY, 19

19 $ 97 BUDGET ZAGREB, August 27 (Hina) - Croatian President Franjo Tudjman on Tuesday presided over a session of the Council of Defense and National Security which discussed the principles of taxation policy for the period 1997-1999 and the bases to work out the budget for 1997, the President's Office said in a statement. Premier Zlatko Matesa, vice-premier Borislav Skegro and Finance Minister Bozo Prka named the aims of the Croatian government's economic policy for the period of the next three years: the implementation of the final phase of the stabilization programme, the making of assumptions for a stable, long-term, sustainable economic growth and development, an intense post-war reconstruction of the country, the reduction of unemployment, the increase of the standard of living, the maintenance of price stability and the rate of the kuna, a speedy implementation of systematic reforms and denationalization, and the incitement of demographic development and the return of emigrants. It was stated that an enviable level of macroeconomic stability had been achieved so far and that now was the time to work out a strategy for the development of certain counties and enterprises and for the rehabilitation of banks. The 1996 production rate marked an increase of over seven per cent, and an even higher one was forecast for 1997. Also discussed were proposals for the incitement of economic development through high-quality development programmes and incentive taxing policy, which would relieve economy and increase investments. It was stated that the direct war damage in Croatia amounted to 150 billion kunas and that 3 billion kunas had been invested in the reconstruction so far. For the return of all displaced persons, expected by the end of next year, it was necessary to invest 4.7 billion kunas. The position of Croatian soldiers was discussed thoroughly; the necessity to speed up the process of privatization was pointed out, as well as the necessity to work out a good social programme which would improve the position of pensioners and the socially endangered. It was concluded that general conditions, both domestic and international, had been achieved for a faster and more successful economic development. The government must continue to work out the budget on the basis of the proposed programmes and the discussion at the session, the statement concluded. (hina) ha jn 271738 MET aug 96