Budget revision

Finmin says VAT increase not being considered

26.08.2010 u 23:40

Bionic
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Finance Minister Ivan Suker said on Thursday a VAT increase was not being considered and that one should follow what European Union countries would do with bank taxes.

"If everyone imposes a bank tax, why shouldn't we?" he told Nova TV's primetime news, adding that "no one is considering" a VAT increase and that there was no reason for a new tax burden.

When asked if he feared a credit rating decline, Suker said the rating would increase once Croatia joined the EU, while the interest rate would drop by 1.5-2 per cent.

When asked if he felt the finger was being pointed at him when central bank governor Zeljko Rohatinski said that he cared about citizens' interests, unlike some politicians, Suker said he did not.

Suker said he was in contact with Rohatinski and that they always agreed key moves. "He's aware of my position and the position of the prime minister, but (he) didn't say anything in that context".

Speaking of economic growth, Suker said Croatia must make way for private capital and make an effort to absorb as much EU funds as possible "because the economic model that was based on investment from the state budget is obsolete".

When asked if budget beneficiaries' salaries and pensions would be frozen over the next two years, Suker said they probably would due to the structure of the budget, adding that "we must show responsibility about spending".

When the interviewer said that Croatia lived on credit, Suker asked, "What would happen if we didn't borrow? How would we pay salaries and pensions?"

When the interviewer said that "our two-decade model of living on credit must come to an end," Suker said Croatia lived on what it earned.

When the interviewed said that EU countries had come out of the recession, Suker said they started coming out of it and that Croatia fell into a recession somewhat later. "As a small country with a small economy Croatia must wait for the big ones to come out of the recession and pull us too. If they don't overcome the crisis, we can't do it alone because our economy is tied to big countries," he said.