Contrary to media speculation, there will be no increase in taxes on milk and bread starting January 1st, the Croatian government has said.

While the next year’s budget discussion continues regarding several controversial points, the government assures that the rumoured elimination of zero per cent VAT on milk, bread and medicines is unfounded.

The president of Croatian Peasant Party (HSS) – one of the coalition partners –Josip Friscic said that while the elimnation of zero tax is one of Croatia’s European Union obligations, the new tax will not be implemented at the beginning of the year.

“There will be no new taxes on January, and then we will negoatte the moment of the implementation and all possible variations,” Friscic said.