Deputy Prime Minister Grcic reacted to a press release in which the HDZ lambasted him for his statements during a TV talk show on Tuesday night about calculations of VAT (Value Added Tax), adding that he slipped up when saying that 2% of VAT amounted to 7 billion kuna.
"Two percent of Gross Domestic Product (GDP) is 7 billion kuna, 2% of VAT is something else, a little less because VAT is paid on end personal consumption," he said today once again slipping up because he said GDP instead of VAT but corrected himself.
Grcic replied to the HDZ that this Opposition party failed to answer a key question where cuts in the budget will occur if VAT is reduced by several billion kuna, and emphasised that the deficit cannot be reduced if budget revenue is reduced. He added that the SDP did not currently opt for "such a radical reduction of VAT as that would be an enormous expense for the budget which could not be recovered in the short-term."
"Only if next year economic growth accelerates and growth exceeds 3% would it be possible to adjust VAT. Currently, it is unrealistic," he underscored. He confirmed that if re-elected, the government would introduce an intermediate VAT rate of 13% on about 15 agricultural products.
(Text: Hina)
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