With our entry into the EU (set for 1 July) when we become a part of the EU common market, we will start the struggle to collect VAT, which is why we will significantly change excise duties at the start of the next year, Linic told the conference called "A day for great plans".

If the excise duty makes a certain product more expensive in Croatia, the buyer will go to a neighbouring country where there are no more customs barriers, the minister explained.

The vehicle excise duty will be changed in accordance with the EU directives which take concern environment protection, he added.

As a result, excises on larger and posher cars will be increased, and cars worth around HRK 150,000-200,000 will have reduced excises, he said.

Also, as of 1 January Croatia will have a changed system of VAT rates, the lowest rate of 5% will be introduced, the next rate will be 10% and the highest 25%, Linic said adding that the VAT in the tourist trade would be lowered to 10% , as previously announced.

The minister said that the government would conduct a technical revision of the state budget in November. Some internal reshuffling will occur and the savings will be used to cover liabilities in the shipbuilding industry and some other purposes.

Linic said that an additional HRK 350 million should be ensured regarding the planned privatisation of the Brodosplit shipyard and its debts, but he ruled out that the budget reshuffle had anything to do with the intended signing of an agreement on the privatisation of Brodosplit.

The budget cannot be held hostage of the consequence of the unsuccessful policy of incessant subvention which means that now we can hardly manage to pay interest rates on incurred debts which have resulted because of the resistance to deal with matters and now people have overnight realised that they can no longer rely on the state budget, Linic said.

The finance minister announced the issuance of bonds to be sold to Croatian citizens in 2013.