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<p align="center"><b>Positive results from collection in the Croatian market, |
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and benefits expected from introduction of zero value added tax rate</b></p> |
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<p>As a result of a restrictive sales policy and higher collection from the healthcare |
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sector, in the last three months, PLIVA has recorded a decrease in receivables |
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from the Croatian healthcare sector, from HRK 613 million at the end of June |
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1999 to HRK 400 million to date.</p> |
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<p>In addition, according to the decision of the Croatian Parliament of October |
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1, 1999 a zero value added tax rate will be introduced for drugs on the reimbursement |
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list as of November 1, 1999. At the moment, the VAT-rate for all drugs is 22%. |
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PLIVA estimates that the introduction of a zero VAT rate will have a positive |
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effect on the companys liquidity and will additionally reduce the level of |
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receivables by HRK 50-70 million during the next year.</p> |
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<p>PLIVA has fixed the limit for domestic healthcare sector exposure to HRK 450 |
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million. </p> |