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Finance Ministry objects to criticism by German chancellor

SLOVAKIA’s Finance Ministry objected to statements by German Chancellor Gerhard Schroeder in which he criticised central and eastern European countries for reducing corporate tax levels.

"The question of direct taxes is fully under the authority of individual EU member countries... and the Slovak tax reform has strictly observed all EU Directives," Peter Papanek, spokesman for the ministry, told the news wire TASR.

"Both the flat-rate tax and the tax reform are fully compliant with agreements on dual taxation, other international agreements, and the Slovak Constitution," he added.

In his criticism, Schroeder said that the average corporate tax in central and eastern European countries was below 20 percent while in the EU it exceeded 30 percent.

"In our countries we have tougher competition as regards both corporate expenditure and labour opportunities. Such policies do not allow them [central and eastern European countries] to finance their infrastructure projects from their own sources, leading to co-financing from Brussels. Thus, at the end of the day problems have to be shouldered by EU members, which we just cannot abide," he added.

According to Papanek, the best way to catch up with the current members is to create an appropriate business environment and attract new investment.

"Therefore we have prepared a tax reform to move the weight from direct to indirect taxes," he added.

Compiled by Beata Balogová from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.

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