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Reader feedback: Little benefit

Re: World Bank positive about Slovak reforms, Business Shorts, September 26 - October 2, 2005

Your story reads: "Changes in payroll taxation could improve the business environment significantly, he [Simeon Djankov, World Bank manager] suggested. Slovakia pays some of the highest payroll taxes in the world. These excessive expenses are mostly due to social insurance premiums paid by employers."

Well progress in that area got a big knock-back. The daily Pravda reported that after years of promising cuts in payroll taxes, Social Security Minister Kaník managed to win a concession that the self-employed will get a 2-percent reduction in their sickness insurance payments.

However, if they get ill they will get sickness benefit only from the eleventh day, or they can choose to pay the full amount of sickness insurance and have the benefit from the first day.

This is a gesture that will hardly help anybody. It will also bring more bureaucracy costs into the social insurance system. The only thing that it does achieve is to promote the idea of "voluntarism" in Slovakia - people can choose what services they want and "opt out" of others.

That should bring the day closer when the Slovak rich finally declare independence from the poor, worn-out country they are tied to.

Roger,
Žilina, Slovakia

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