Slovak ministers propose abolishing tax exemptions to save €440 million in 2011

Minister of Finance Ivan Mikloš (SDKÚ), Minister of Labour Jozef Mihál (SaS) and Minister of Health Ivan Uhliarik (KDH) have jointly prepared proposed changes in the income tax and deduction system that would do away with what they called unsubstantiated exemptions and deformations, Mikloš announced at a press conference on Monday, August 16, as reported by the TASR newswire. According to the finance minister, the state budget could gain €440 million next year, with prospects of increasing this figure to €560 million and €635 million in the following two years.

Minister of Finance Ivan Mikloš (SDKÚ), Minister of Labour Jozef Mihál (SaS) and Minister of Health Ivan Uhliarik (KDH) have jointly prepared proposed changes in the income tax and deduction system that would do away with what they called unsubstantiated exemptions and deformations, Mikloš announced at a press conference on Monday, August 16, as reported by the TASR newswire.

According to the finance minister, the state budget could gain €440 million next year, with prospects of increasing this figure to €560 million and €635 million in the following two years.

“We propose cancelling tax-exempt parts of the tax base for special-purpose savings, life insurance and additional pension savings,” Mikloš told TASR. The tax-exempt part of the tax basis will remain in place only for so-called active incomes, which would make incomes from work more advantageous than those coming from capital.

Another measure aims to unify lump-sum allowances at a single level of 30 percent in place of the three current levels of 25, 40 and 60 percent.

Mikloš noted that higher taxation will also affect state officials who will also see their lump-sum allowances taxed. But the proposed legislation will not apply to MPs, who Mikloš said should propose measures themselves aimed at taxing their incomes in accordance with a ruling coalition agreement made last week.

Source: TASR

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

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