Archive of articles - June 2014, page 4

Finance Ministry increases estimate of tax collection by €290 million

The state’s income from tax and payroll deduction collection this year should be €290 million higher than estimated by the Finance Ministry in its February analysis, Finance Minister Peter Kažimír said at a press conference on June 24. “It’s mainly due to our successful fight against tax evasion,” he said, according to the TASR newswire. “It’s also the overall macro-economic climate, a better situation on the labour market and reviving household consumption that are having a positive impact on the state’s income.” He stressed that the effective VAT rate has been rising for six quarters. At the moment, it stands at 14.1 percent. [The VAT rate in Slovakia is currently set at 20 percent, with certain goods, such as medicines and books, having a reduced rate of 10 percent. The effective tax rate means that the state – due to tax evasion – in fact collected an amount as if the rate was actually set at 14.1 percent. – ed. note] The highest effective VAT rate in Slovakia has been in 2005 – 15.5 percent [at the time the actual VAT rate was 19 percent], while the lowest one was in the second quarter of 2012 – 12.5 percent [with the actual rate of 20 percent]. Kažimír also praised the income from the corporate tax which has been elevated to 23 percent as of 2013. For this year, ministry increased its October forecast of this tax by more than €80 million. “We collected almost €360 million compared to what would be if the rate were at 19 percent,” he said, adding that companies don’t seem to have had a higher inclination toward tax evasion.