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Fico speaks against lowering VAT back to 19 percent
24 Jun 2014 Flash News
VALUE-ADDED tax should not be lowered from the current 20 percent to 19 percent, Prime Minister Robert Fico stated at an international conference in Bratislava on June 23.
"If you lower the VAT from 20 to 19 percent, it has absolutely no impact on prices, because retailers won't lower their prices,” Fico said, as quoted by the TASR newswire. “So actually, you just donate €200 million to the retailers."
Speaking at a conference 'Ten Years in the EU: Opportunities for Business Competitiveness and Growth', organised by the American Chamber of Commerce in cooperation with the Representation of the European Commission in Slovakia, Fico said the question is whether the government gives the €200 million to retailers or uses it for “positive programmes” that would be part of a large package of measures his ruling Smer party plans to introduce at its extraordinary party congress on June 28.
"I prefer dividing those €200 million among the people rather than giving it to retailers. This is our philosophy," said Fico, as quoted by TASR, adding that he is awaiting a final recommendation from the Finance Ministry.
The currently valid law states that the VAT rate should be reduced automatically when the public finance deficit falls below 3 percent GDP. This rule was introduced under the government of Iveta Radičová.
Opposition MP Ivan Štefanec said the government’s approach to the legislation only confirms the fact that the government is unable to manage the consolidation of public finances responsibly, and only at the expense of people, TASR reported.
"We don't need new taxes, as the Prime Minister claims,” he said, as quoted by TASR. “The solution is in more effective management of public finances and necessary reforms, which stopped when Fico assumed power.”
Compiled by Michaela Terenzani from press reports.
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