A ‘MILLIONAIRE’S tax’ by which people earning higher salaries would pay up to Sk18,000 more to the state budget annually than lower wage earners will not affect members of parliament, according to the Finance Ministry’s proposed Income Tax amendment.
The ministry has decided that the lump sum monthly compensation for expenses that MPs receive, which can amount to 70 to 80 percent of their gross monthly salaries of Sk51,800, will not be included as taxable income, and therefore MPs will not be considered “millionaires” for the purposes of the new higher dues.
With their expense accounts, MPs actually earn from Sk88,230 to Sk93,420 a month, putting them among the top group of wage earners with monthly salaries over Sk88,500 who next year will not be allowed to declare a basic tax-exempt amount like lower income earners.
While the highest wage earners will still pay 19 percent income tax like everyone else, the progressive reduction of the basic tax-exempt amount they are entitled to declare will cost them up to Sk18,000 a year.
Now, with their taxable salaries defined as Sk51,800, MPs will fall just below the Sk56,000 monthly salary cut-off beyond which individuals begin paying more in personal income tax.
When the “millionaire’s tax” was first proposed, Prime Minister Robert Fico said that MPs salaries would “automatically belong” among those hit by the higher dues, according to the Sme daily.
Now, the Finance Ministry wants to leave the MPs exempt until it can widen the tax provisions “to include the lump sum expense compensation for judges, prosecutors, top civil servants and deputy ministers,” according to ministry spokesman Miroslav Šmál.