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Zagreb - Finance Minister Marko Primorac presented the government's proposal to amend a package of tax laws to Parliament on Thursday, saying that it had received an equal amount of support and criticism and that this was a good indicator.
"Some say that these are huge changes that will strongly affect their revenues, while others say that this is just an exercise in futility. Some say that personal non-taxable income should be higher, while others say that the proposed increase is too significant and that towns and municipalities will lose too much money," Primorac said.
The proposed amendments concern every income-earning citizen, and their aim is to increase people's living standards and purchasing power considering inflationary pressures, he said and added: "What's important is that people live better after this."
Primorac noted that the reduction of the VAT rates last year did not result in the reduction of prices, so the government had decided to increase people's net earnings through the tax system.
The tax burden will be reduced next year when economic growth is expected to slow down, he said. This year, GDP growth is projected at 2.2%, and hopefully this projection will be revised up, he added.
Primorac confirmed that the budget is filling up well and that revenues are growing, as well as expenditures. He announced a budget review in about a month and a half to increase the expenditure side by about €200 million for wages, about €100 million for pensions over indexation, and for the aid package. He said that budget funds are being redistributed.
The minister announced that the government will again "considerably" increase the minimum wage as of 1 January, without specifying by how much. He said so after MP Milan Vrkljan (Righteous Croatia) proposed that the government should increase the monthly minimum wage to €800 and adjust it for inflation twice a year rather than once.