Croatian government debates VAT on milk, bread, medicine

The Croatian government is considering introducing taxes on milk, bread and medicines in an effort to collect more money to finance rising debt payments. Croatia paid 5.3 billion kunas (719.5 milion Euros) for interest on debt two years ago. This year those financial obligations have grown to 6.3 billion or 855 million Euros, and are expected to reach 7.3 million (991 million Euros) in 2011.

The cost of these annual expenditures has surpassed all state subventions to companies or farmers.
The government is currently debating where to find the additional funds for these rising costs as they prepare the next year’s budget, the daily Vecernji List writes.

According to the government, the budget for 2011 must not defy the established framework and the three-year guidelines. The revenues from taxes are expected to be 108 billion kunas (14.6 billion Euros) while expenditures must stop at 122 billion (16.6 billion). According to these expectations, the expenses must be half a billion kunas lower than this year.  The maths may not add up when taking other expenses into consideration, such as higher debt payments, more money for pensions, and financing the upcoming census.

News source: Croatiantimes.com link: article