Economic and Social Council applauds rise in wages and pensions

The Economic and Social Council, a tripartite body consisting of representatives of the government, employers and trade unions, on Friday welcomed a draft of amendments to tax legislation envisaging a rise of the nontaxable monthly income from HRK 2,200 to HRK 2,600 and also a 400 kuna rise of nontaxable pensions from HRK 3,400 to HRK 3,800 and the council endorsed changes in the tax brackets.

These topics will be again on the agenda of social partners who will convene on Wednesday, 15 October, in the Finance Ministry, and the government will take its position on all proposals after that, Labour and Pension System Minister Mirando Mrsic said after today's GSV meeting.

The minister expressed satisfaction with assessments from both employers and trade unions that the government's proposal on tax amendments was going in a good direction.

Agreement has been reached on a minimum wage exemption from taxes, no matter how high the minimum pay is, and it will probably rise in the future, Mrsic added.

Unions' representative Vilim Ribic welcomed the proposed increase in take-home pay, but warned that this rise was not satisfactory.

The proposed tax amendments will not produce a desirable outcome, as they will not trigger higher consumption, Ribic said, explaining that the proposed changes would bring about some two billion kuna which he described as "a drop in the bucket", as demand could rise only one percent.

Ribic believes that citizens will use a rise in their monthly incomes to cover their debts or to make savings.

He also warns that the proposed changes would not narrow a gap between the richest and the poorest.

The partners in the GSV voiced satisfaction with the convening of this council after only a rump council held meetings in the last 12 months.

(Hina) ms

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