ZAGREB, Sept. 20 (Xinhua) -- The Croatian government sent a proposal of tax reform to the Parliament on Thursday, which should relieve citizens and businesses for 1.4 billion kuna (220 million U.S. dollars) in 2019 and additional 1.6 billion kuna (250 million U.S. dollars) from 2020.

Nine new laws concerning taxes are expected to be adopted in November or December.

"The tax reform, which will be implemented from January 1 next year, foresees a drop from 25 percent to 13 percent in VAT for fresh meat, fish, fruit, vegetables, baby diapers and lower prices for citizens," Prime Minister Plenkovic said.

In 2020 the standard VAT rate will drop from 25 to 24 percent.

Salaries above 17,500 kuna (2,770 U.S. dollars), but under 30,000 kuna (4,756 U.S. dollars) will no longer be taxed at a rate of 36 percent, but 24 percent, while salaries below 3,800 Croatian kunas (602 U.S. dollars) will not be taxed.

The health insurance contribution should be higher by 1.5 percent, which would enable better health services.

"We have estimated that there is a room for tax cuts to improve the living standard of the citizens, but also to create the conditions for a more favorable operating of the companies," Plenkovic said.

Croatian Prime Minister also announced at a government session on pension reform that foresees to raise the retirement age from 65 to 67.

Unions and Pensioners' Associations have announced that they will oppose the proposal on pension insurance, demanding that the retirement age remains at 65 years old.