Employers reacted angrily August 22 when the Finance Ministry announced a proposal to raise levies paid towards insurance by 0.5%. Under the proposal, payments by employees into the social insurance scheme would rise as of the beginning of the next year, and Finance Minister Brigita Schmögnerová has said that employees should bear a greater portion of the increased levy than the employer.
However, Association of Employers (AZZZ) representatives said that any increase forced on employers would be unacceptable and that the government had broken a pledge when it took power in 1998 to lower insurnace payments and improve the business environment.
"Total levies constantly rise, and further increases could significantly harm the competitiveness of Slovak businessmen," František Bruckmayer of the AZZZ told the SITA news agency. He added that even if the proposal were approved, AZZZ chiefs would fight it as members of the tripartite commission, an advisory body composed of government, business and labour representatives. The insurance proposal would need the support of the commission to be passed.
The ministry's proposal faces a tough ride through to cabinet approval on other fronts as well, with concerns that pushing a greater financial burden on companies would hinder corporate growth - something unlikely to meet with the support of Deputy Prime Minister for the Economy Ivan Mikloš, who has been vocal in his support of the growth of Slovakia's business sector.
Analysts have said that any rises in company insurance payments would have a negative effect on growth in the corporate sector. "In terms of the economic situation, present [insurance payment] rates are too hard for companies and employees. The rise would not be such a good idea, and companies should rather use the money to reinvest in the economy," said Pavol Ondriška, analyst at Slávia Capital.
The social insurance firm Sociálna poisťovňa (SP) would see its revenues grow by 1.1 billion crowns over the next year if the raise was adopted.
28. Aug 2000 at 0:00 | Ed Holt