Gov't tweets: Tax reliefs for first home buyers revoked over abuses

The abolishment of tax reliefs for first home buyers has been proposed as there have been too many cases of abuse of that relief while the reduction of taxes on real estate from 5% to 4% will encourage the real estate market, Finance Minister Slavko Linic responded to question which citizens posted on Twitter.

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Linic and Deputy Prime Ministers Branko Grcic and Milanka Opacic responded to citizens questions via Twitter in connection with the guidelines for economic and fiscal policy in the 2014-2016 period, presented at the government's meeting on Thursday. The government officials once again told the citizens, who expressed dissatisfaction with the proposed measures, that "spending is not a way out."

"We have been spending for 20 years and now our debt amounts to EUR 46 billion. We must build the future with investments and development and not expenditure," the three ministers tweeted.

Explaining the reasons for abolishing tax reliefs for first home buyers. Linic said there have been too many cases of abuse, adding that the reduction of taxes on real estate from 5% to 4% was proposed so as to encourage the real estate market.

Most of the questions referred to the proposed increase of intermediate Value Added Tax (PDV) rate from 10% to 13%. "This increase will not cause price hikes and a fall in consumption," Linic claims.

Asked why the government had not proposed a reduction of the primary VAT rate, Linic said this was not possible at the moment because of the enormous public debt which must be paid back. He said excises taxes were high but added that they were still the lowest in the European Union.

Linic recalled that amendments to the Penal Code would classify failure to pay salaries and contributions as a criminal act with a penalty of up to three years in prison. The Finance Ministry would soon start issuing lists with the names of employers who are not paying out salaries, Linic added.

Asked why the number of counties and their administrative staff was not reduced, Regional Development and European Union Funds Minister Branko Grcic said the government would launch public sector reform at a local level.

(Hina)

Video: http://youtu.be/0y3E45YkPJw

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