The Croatian Democratic Union (HDZ) economy committee on Sunday called on the government to reconsider its decision to raise the zero rate of the Value Added Tax to five-percent rate, which is planned on 1 January, amidst the growing poverty and galloping unemployment as, the HDZ explains, higher taxes on bread and milk will be an additional blow to the most vulnerable groups of citizens.
The strongest opposition party accuses the government of making citizens poorer by "its tax aggression".
As of January 1, the zero VAT rate on bread, milk, books, scientific publications, medicines, orthopaedic aids and cinema tickets will be replaced with a rate of five per cent in Croatia which recently amended the Value Added Tax Act by majority vote in parliament. The law was amended to align it with European Union directives which do not allow a VAT rate below five per cent. As a result, the government expects to earn an additional HRK 1.3 billion.
The HDZ says in a statement that "Croatia is due to enter the European Union on 1 July 2013, and the new taxes will be introduced a half year before" and also recalls that the higher VAT rate would ensue after "all the year long citizens have been impoverished through the tax aggression with higher VAT rates and excise duties, and price hikes of electricity, gas, motorway tolls, food and heating", while on the other hand the government will reduce taxes on fur coats, jewelry and imported cars.
Therefore, the HDZ accuses the government of keeping impoverishing the poor to make the rich even richer.
