LOWER HOUSE CONCLUDES DEBATE ON AMENDMENTS TO INCOME, PROFIT TAX A

A $ CTS ZAGREB, Nov 29 (Hina) - The House of Representatives on Friday completed the debate on a bill of amendments to the Income and Profit Tax Acts. The amendments were aimed at relieving the tax burden by reducing the lower of the two income tax rates from 25 to 20 percent, said Finance Minister Bozo Prka, presenting the Bill. The non-taxable portion of the salary would be increased from 700 to 800 kuna. The higher income tax rate would stay the same - 35 percent. Social Liberals and Social Democrats supported the Bill, albeit with reserves. According to Branko Levacic of the Croatian Social Liberal Party, the amendments were a good step in the right direction, toward a "real tax reform," while Zeljka Antunovic (Social Democratic Party) called for the introduction of more than two tax brackets. "The amendments directly support the living standard of employees and encourage job creation," said Djuro Njavro (Croatian Democratic Union). The amendments on the Profit Act, on the other hand, propose to increase the profit tax rate from 25 to 35 percent. "This will not increase the overall fiscal burden, since we are also increasing the protective interest rate and introducing accelerated depreciation," Minister Prka said. Here, too, SDP members were in favour of progressive taxation, which would "stimulate job creation." Social Liberal members were more worried about the effect of increased rates on potential foreign investors. The session was adjourned till Wednesday, Dec 4. (hina) as 292129 MET nov 96