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Slovakian report
by Euro Reporter
2012-06-03 10:58:31
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Slovaks to tax more energy, telecommunication sectors, Sme says

Slovakia will introduce a 4.2 percent surcharge on the income-tax rate for regulated companies such as in the energy and telecommunication sectors, Sme reported citing Prime Minister Robert Fico.

All companies with a profit of at least 3 million Euros ($3.74 million) and whose main activities are regulated by the state will be subject of the additional tax, Sme said. The surcharge will be levied on top of a regular income tax, which the government plans to raise to 23 percent from 19 percent, the newspaper said.


Slovakia’s measures are sufficient to meet budget goal, IMF says

The Slovak government’s planned measures to improve public finances “should be sufficient” to reduce the euro member’s budget deficit below the European Union’s limit, the International Monetary Fund said. The scope for further broad spending cuts is limited after the budget shortfall narrowed to 4.8 percent of gross domestic product last year from 8 percent in 2010, Daria Zakharova, the head of the fund’s mission in Slovakia, told reporters today. The measures proposed by the government, which mainly seek to boost tax revenue, are “broadly appropriate,” she said.

The second-poorest euro region member must boost revenue and cut spending by about 1.5 billion euros ($1.9 billion) to trim the budget deficit to meet the limit of 3 percent of GDP by next year at a time when the economy is hurt by the region’s debt crisis. The government wants to increase corporate and personal income taxes as well as introduce special levies for selected industries to collect more revenue. The Washington-based lender forecast the Slovak economy to grow 2.6 percent this year, one of the fastest in the EU, and 3.5 percent in 2013. The potential spillover of the euro region’s debt crisis is the main risk to the outlook, she said.


Slovakia unveils special bank tax plans

Slovakia’s Prime Minister Robert Fico has recently announced plans to introduce a special windfall tax on banks and to extend the existing tax on banking deposits, as part of government efforts to reduce the budget deficit. Speaking in Bratislava, Fico revealed government plans to introduce a special banking tax in Slovakia in 2012, to generate a much-needed EUR50m (USD62.3m) in additional revenues for the state. Fico also unveiled details of government plans to extend the existing 0.4% tax currently levied exclusively on corporate banking deposits to individual banking deposits, to yield a further EUR125m by 2013.

Defending the proposals, Fico underlined that it is “just, moral and ethical” that the country’s banks participate in redressing state finances, particularly given that the banks have recorded record profits over the past few years. Fico also warned banks not to increase their commissions to compensate for the higher tax burden.

The government’s proposed banking tax plans form part of the government’s latest austerity package, designed to reduce the budget deficit from 4.8% currently to below 3% of gross domestic product (GDP) in 2013, and containing plans to increase taxes on the rich and on businesses, as well as to reform the pension system. Within the framework of its austerity programme, the government has already announced its intention to ‘unflatten’ the flat income tax by introducing a higher rate of 22% for high earning companies and a 25% higher rate for individuals earning more than EUR33,000 per year. Currently, there is a flat tax of 19% in Slovakia.

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