IN SHORT

Smer might raise tax for rich

THE COUNTRY'S most popular opposition party, the social democratic Smer, is considering raising taxes on people who earn more than Sk1 million (€27,000) a year from the current 19 to 25 percent in the event that it forms part of the government after June general elections.

According to Smer MP Jozef Burian, the party also favours lowering the income tax rate for low-income groups to 15 percent.

If such changes were introduced, it would mean the end of the 19 percent flat tax in Slovakia, a measure that has both attracted foreign investment and actually increased revenues to the state budget, the SME daily wrote.

Many politicians and economists have rejected Smer's tax proposals. Last week, all political parties that have a chance of earning over 5 percent support in elections and going on to take seats in parliament rejected the abolition of the flat tax.

According to Richard Sulík, the co-author of Slovakia's flat tax policy, Smer's "millionaire tax" could also be called an "envy tax". He said the change would only bring Sk800 million (€21.4 million) extra to the state budget, as he estimates that only 14,000 of Slovakia's 2 million working people earn more than Sk1 million a year.

"Of course, some will dodge paying [the tax], meaning that revenues will be even lower," he said.

On the other hand, a tax rate of 15 percent for people with the lowest wages would leave them each with only Sk800 more annually, or less than Sk70 per month.

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