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THE WHITE HOUSE

Office of the Press Secretary


For Immediate Release April 12, 1999
                    PRESIDENT CLINTON ANNOUNCES A PLAN
           TO PROVIDE SPECIAL TAX BENEFITS TO MILITARY PERSONNEL
                     IN THE KOSOVO AREA OF OPERATIONS
                              April 12, 1999

     Today, President Clinton announced his intention to issue an

Executive Order designating the Kosovo area of operations as a "combat zone" for tax relief benefits.

The Kosovo area of operations encompasses the Federal Republic of Yugoslavia, Albania, the Adriatic Sea and the northern Ionian Sea. It also encompasses the airspace above these areas, thus covering the aircrews of long-range bombers and naval aircraft flying missions into the combat zone from outside the area.

This designation will provide several tax benefits to United States military personnel serving in the designated area, including the following:

Their deadline for filing and paying taxes will be extended;

     Their military pay for months served in the combat zone will be
     exempt from income tax (subject to a dollar limit for commissioned
     officers), and will not be subject to income tax withholding; and

     Their toll telephone calls originating in the combat zone will be
     exempt from the telephone excise tax.

     The extension of tax deadlines will also apply to U.S. military

personnel deployed overseas in support of operations in the combat zone, and others, such as Red Cross personnel. The President's authority to confer these benefits lies in various provisions of the Internal Revenue Code. In addition, U.S. military personnel who are serving in this area will be eligible for Imminent Danger Pay of $150 per month. Personnel serving in Croatia, Bosnia-Herzegovina and Macedonia are already receiving these benefits under 1996 legislation designating those countries as a Qualified Hazardous Duty Area.

Once the President issues the Executive Order, the Department of Defense, in conjunction with the Commander in Chief U.S. European Command, the military services and the Department of Treasury, will take the necessary steps to implement the Order, including designation of specific units to be covered.

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