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IMF: Lowering VAT to 19 percent would harm budget
18 Jun 2014 Flash News
Rather than cutting the VAT rate back to 19 percent, Slovakia should retain the current level of 20 percent, head of International Monetary Fund (IMF) mission in Slovakia James John told a press conference in Bratislava on June 17, when unveiling the IMF’s recommendations to the country.
John, who has spent two weeks in Slovakia with the IMF team observing and evaluating the country’s economic performance, went on to say that if Slovakia resorted to cuts in VAT, this could result in losses to state coffers to the tune of 0.3 percent of GDP. The country would then be forced to compensate for these losses either by searching for other resources or by cutting its expenditures. The IMF representative added in this context that Slovakia needs to increase its expenditures on infrastructure and to boost employment, which could be hampered due to such cuts in VAT.
John praised the Slovak government’s courage to eliminate tax evasion, the SITA newswire wrote. He also recommended to accelerate the preparations for the introduction of real-estate tax based on the value of real estate. The fund would welcome as well the reduction of the debt through privatisation of state assets.
(Source: TASR, SITA)
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