Gov't includes tax debts in its debt write-off scheme

The Croatian government on Thursday made a decision to include the Tax Administration in its scheme aimed at alleviating some citizens' financial problems.

The decision follows a decision of January 15 and an agreement on the write-off of debts of the poorest citizens to banks, telecommunications companies, public companies and local self-government units.

Under the latest decision, the Tax Administration will join the government's debt write-off scheme by writing off taxpayers' debts amounting to up to HRK 25,000 and incurred by September 30, 2014. The debts to be written off include principals and all costs, but not default interest.

According to data from the Financial Agency (FINA) in 2014, more than 52,000 taxpayers were undergoing distraint proceedings for debts amounting to less than HRK 2,000, incurred due to job loss or closure of a small business.

Speaking to reporters before the government session, Finance Minister Boris Lalovac said the Tax Administration was already working on establishing how many such taxpayers there were and how much they owed.

Asked when the government would formulate an amendment to the Credit Institutions Act whereby the frozen exchange rate for the Swiss franc at HRK 6.39 would also be applied to loans taken out by family farms and small businesses, Lalovac said that the amendment was being worked on.

Prime Minister Zoran Milanovic said on Wednesday that he had instructed Lalovac to include a provision in the amendments to the Credit Institutions Act, currently in parliamentary procedure, that would apply the frozen exchange rate for the Swiss franc at HRK 6.39 to loans taken out by family farms and small businesses.

Lalovac said he hoped the amendment would be forwarded to parliament next week.

He also underlined that after the government session he would meet with Croatian National Bank (HNB) governor Boris Vujcic to start work on a comprehensive solution for loan-holders who have taken out loans pegged to the Swiss franc and the euro.

"I am for any option that may be agreed, but the HNB and commercial banks, too, have to agree," said Lalovac.

He said that all sides involved were willing to cooperate, and that the current problems were mostly the banks' problems. "They are aware of it, they want to help and I think that we can find a mutually satisfactory solution," said Lalovac.

(EUR 1 = HRK 7.693532)

(Hina) rml

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