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EDITORIAL

Taxes: Too many Slovaks are asking "Why pay?"

The deadline for paying taxes in Slovakia has come and gone, but the reluctance of many Slovak citizens to discharge their financial duties towards the state remains.
This poor sense of civic responsibility is one of many social deformities inherited from the 1948 to 1989 communist regime. "If you're not stealing from the state, you're stealing from your own family" became a catchphrase during those decades, as well as a popular justification for everything from job absenteeism to embezzlement.
Almost ten years after the fall of communism, however, this defiant attitude towards civic duties remains as strong as ever, costing the state billions of crowns in lost revenues every year. The government and Finance Minister Brigita Schmögnerová have made a priority of tightening tax rules and punishing tax evaders, but public opinion remains set against voluntary compliance.


Swing your partner
Prime Minister Mikuláš Dzurinda is so happy that tax day is over that he can't resist taking Finance Minister Brigita Schmögnerová for a quick turn. But the pained expression on Deputy Prime Minister Ivan Mikloš' fac hints that the windfall may not be all that is expected.

The deadline for paying taxes in Slovakia has come and gone, but the reluctance of many Slovak citizens to discharge their financial duties towards the state remains.

This poor sense of civic responsibility is one of many social deformities inherited from the 1948 to 1989 communist regime. "If you're not stealing from the state, you're stealing from your own family" became a catchphrase during those decades, as well as a popular justification for everything from job absenteeism to embezzlement.

Almost ten years after the fall of communism, however, this defiant attitude towards civic duties remains as strong as ever, costing the state billions of crowns in lost revenues every year. The government and Finance Minister Brigita Schmögnerová have made a priority of tightening tax rules and punishing tax evaders, but public opinion remains set against voluntary compliance.

A great many people in this country do not report their entire income to the tax office. In 1997, a senior official in the Finance Ministry under the previous government of Prime Minister Vladimír Mečiar estimated Slovakia's 'grey market' - work done and goods produced that are not included in official statistics, and thus not subject to tax - at 40% of gross domestic product. If the official's estimate was correct, then almost 260 billion Slovak crowns ($6 billion) of potential tax base was lost to the government that year.

Opinions vary as to why people should be so reluctant to cough up what they owe the state. One sociologist with Comenius University in Bratislava tied it to government and state-endorsed corruption during the 1992 to 1998 Mečiar era, saying that many people had begun to believe that it didn't pay to be honest when top state officials were lining their pockets at the public's expense.

Other explanations pin the blame on the nation's falling standard of living - Slovaks earn so little that skimping on taxes is a matter of survival - or on cultural factors such as the village-based tradition of bartering services rather than paying cash for work done. Drawing up contracts and writing out receipts for work, it is sometimes argued, goes against the grain in Slovakia, a country where many stores did not use cash registers until 1996.

The state itself has also had a hand in shaping people's attitudes towards taxes, largely by making the task of payment a complex and frustrating one. The official tax form is an intimidating and perplexing document; to fill it out properly, you need to have a copy of the nation's tax code on hand, because the form frequently asks you to perform an arithmetic task "as specified in paragraph seven of the tax law."

For people with a university education and some understanding of economics, the form may be a snap, but one can imagine the troubles that the average streetcar driver, construction worker or agricultural labourer might encounter in trying to pay their taxes.

Still, people's attitudes towards taxes say a great deal about their understanding of civic responsibilities. Many people do not seem to have made the connection between the nation's crisis-ridden health care and school systems and the reluctance of citizens to pay the state what they owe.

Nor again do people seem to understand paying taxes as a kind of vote of confidence in the government. Having elected a new administration last fall, many citizens are still waiting for Prime Minister Mikuláš Dzurinda to fulfill his foolish promise to "double salaries"; the notion of paying taxes on everything you earn is far less attractive, and thus has made far less headway.

But in the end, how Slovakia fares economically during the next few years will largely depend on whether or not the government is able to convince people that 'fessing up to what they earned and paying taxes in full is their duty as citizens.

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