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Smer alone on cancelling flat tax

SMER, Slovakia's front-running social-democratic opposition party, will have a difficult time abolishing the country's 19 percent flat tax if it enters government following June elections, as no other major political party supports the idea.

The flat tax was introduced by the current centre-right Dzurinda administration in 2004 as part of its efforts to reduce public sector spending. It has been praised by international economic bodies and has drawn foreign investment, but is bitterly opposed by Smer as a measure the benefits mainly the rich.

Other political parties, however, maintain that the flat tax rate must be maintained, although some, such as the opposition Christian Democrats and Free Forum, have called for the income tax rate to be cut to 14 or 15 percent, the SME daily wrote.

According to Finance Minister Ivan Mikloš of the ruling Slovak Democratic and Christian Union, the more pro-reform the new government after June 17 general elections, the greater the chances for decreasing the overall tax burden.

In the area of value added tax, the current ruling parties want to maintain a unitary 19 percent rate for income and value added tax, while the opposition proposes introducing a lower VAT rate on essential goods and services.

The opposition Movement for a Democratic Slovakia, for instance, proposes that VAT be cut on food, medication, books, and tourism. The non-parliamentary Slovak National Party, which has a good chance of winning seats in parliament, supports the idea of a lowered VAT rate as well.

Compiled by Martina Jurinová from press reports
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