Prime Minister Robert Fico has revealed part of his tax plans in the event his Smer party wins the June general election, the Sme daily reported on March 25: he would increase taxes on the rich. However, it is not yet clear who will fall into this category.
In spite of promises made before the 2006 general election, he has not changed tax rates for banks and big corporations, nor does he intend to do so in the future, the daily reported. The increase in taxes now proposed would only affect individuals with above-average incomes. Although apparently opposed to the flat tax, he has not abolished it, instead introducing the so-called millionaire tax, i.e. a reduction in the non-taxable portion of the tax base so that high earners pay more tax. The state budget had a big deficit last year, so it seems the government has decided to raise more money from taxes, Sme wrote on March 25.
Smer’s current coalition partners have not ruled out the idea of a progressive tax (i.e. an end to the flat tax) but they warn that the issue must be handled sensitively. Opposition Slovak Democratic and Christian Union (SDKÚ) MP and former finance minister Ivan Mikloš, who was instrumental in introducing the flat tax, said a progressive tax would not be a good way to solve the budget deficit. Richard Sulík of the newly formed Solidarity and Freedom (SaS) party said he was surprised by the idea, adding that rich and successful Slovaks would very probably flee the country if a progressive tax was introduced.
Compiled by Zuzana Vilikovská from press reports
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25. Mar 2010 at 14:00