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Charities to benefit from new tax law

When submitting their upcoming tax declarations for 2001 Slovaks will be able to donate one percent of their taxes to a non-governmental organisation (NGO) or charity of their choice.
Under a recently amended income tax law, which parliament passed December 4, people will be entitled to give the one per cent of their total annual tax to an NGO, church organisation or public-service body rather than let the state decide.
If all 2.28 million economically active Slovaks made use of the possibility, said Arpád Lorincz, head of the first Slovak non-profit service centre, between Sk250 and Sk300 million ($5.1 to 6.12 million) could be collected.


The new tax law has been welcomed by NGOs and charities across the country. Homeless people could be among those benefitting from the new legislation.
photo: Ján Svrček

When submitting their upcoming tax declarations for 2001 Slovaks will be able to donate one percent of their taxes to a non-governmental organisation (NGO) or charity of their choice.

Under a recently amended income tax law, which parliament passed December 4, people will be entitled to give the one per cent of their total annual tax to an NGO, church organisation or public-service body rather than let the state decide.

If all 2.28 million economically active Slovaks made use of the possibility, said Arpád Lorincz, head of the first Slovak non-profit service centre, between Sk250 and Sk300 million ($5.1 to 6.12 million) could be collected.

"Of course, this would be an ideal situation. Realistically I think about one quarter to one third of people will make use of the chance," Lorincz said.

He added that the change in Slovak legislation followed a Hungarian model, where people have had the opportunity to decide who receives one per cent of their taxes for five

years now.

The contributions are expected to help those organisations who, according to Zuzana Fraňová of Bratislava-based Donors Forum, "do valuable work but are often cash-strapped for financing their activities".

"Citizen will not pay less in taxes. They will, however, decide for what purpose the one per cent will be used. State-run schools, hospitals or theatres are financed from the state budget which is largely fed by tax payers. This one per cent is dedicated to organisations who don't receive these state resources," said lawyer Peter Handiak at a Donors Forum press conference held December 6.

Andrea Borčová, the head of a charity centre in the eastern Slovak town of Humenné, praised the idea. Borčová runs an advice centre for youth and families, organises free time activities for Roma children, and helps elderly people.

"We're directly financed by sponsors and individual donors through our head organisation, the Greek-Catholic diocese charity. But charities like ours are always suffering from lack of money, and often the work we do is not paid for at all.

"I hope the one per cent will help us, although I don't expect that it will solve all of our financial problems," she said.

The information centre said a detailed media PR campaign would begin at the end of December.

A complete list of organisations to which contributions could be made will be known by February 15. It will be produced by regional notary offices around the country and distributed to local tax offices, local notary offices as well as to 14 regional co-ordinators who will be available for public inquiries.

Štefan Kutenič, head of the Chamber of Notaries, estimated the number of organisations who would apply for the one per cent at between 5,000 and 10,000.

"To prevent potential machinations, only organisations founded no later than 2000 will be allowed to receive the one per cent," Kutenič said.

If people decide to take part in the one per cent activity, they should inform their company accountants of their intentions in mid-February. Self employed business people should fill out a special form declaring that they want to donate the one per cent to a particular organisation when submitting their tax declarations by the end of March.

Lorincz predicted that most donations would go to charities and organisations which offer social and health services.

"These are areas which most Hungarians chose to support. We expect Slovaks will distribute their taxes similarly. Less money will probably go to sports or environmental awareness organisations."

Catholic priest Ján Sucháň welcomed the possibility to contribute his one per cent, and said: "It will not be difficult to decide who to give it to because there's still lot of misery and shortage around us."

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