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Commission to scrutinise tax lease deal

THE RESIGNATION of Miroslav Mikulčík from the top post at Slovakia’s Tax Directorate over a dubious five-year, €6.6-million office leasing deal with a firm co-owned by a regional official of the ruling Slovak Democratic and Christian Union (SDKÚ) has not resolved the issue of whether tax offices in Košice will remain in their original sites or move into a single shared building.

THE RESIGNATION of Miroslav Mikulčík from the top post at Slovakia’s Tax Directorate over a dubious five-year, €6.6-million office leasing deal with a firm co-owned by a regional official of the ruling Slovak Democratic and Christian Union (SDKÚ) has not resolved the issue of whether tax offices in Košice will remain in their original sites or move into a single shared building.


A five-member commission consisting of representatives of the Ministry of Finance and the Tax Directorate will now review how the directorate proceeded in setting up the rental deal. Finance Minister Ivan Mikloš (SDKÚ) has said he wants to invite the head of parliament’s finance committee, Jozef Kollár, of Freedom and Solidarity (SaS), to join the commission.

An analysis that the Tax Directorate and the SDKÚ has used to defend the rental plan for the Košice tax offices has come under scrutiny with ruling coalition partners expressing doubts about its finding that moving all the offices into a shared building would be the best option.

The deadline for submitting bids to lease a building where the tax offices could eventually move has been extended from May 10 to the end of the month. The commission will evaluate these bids as well.

“It is important that the commission makes the right decision so that we can advance a little bit,” said Igor Krnáč, who was charged with leading the Tax Directorate following the resignation of Mikulčík, as quoted by the SITA newswire.

Mikloš has hinted that the commission might ultimately conclude that the tax offices will not move into a shared building.



The original leasing controversy



The original case, which prompted significant tension within the ruling coalition last month, was brought to the media’s attention by opposition leader Robert Fico on April 11, when he presented the Tax Directorate’s decision to rent office space in Košice from Nitra Invest, a company owned by a regional SDKÚ official, as a tale of party cronyism. He alleged that some of the money from the deal would end up in the SDKÚ’s accounts, though he presented no evidence to back up this claim. Mikulčík, who as tax chief had approved the deal, immediately responded that the contract was completely in line with applicable laws and would save the state money. On April 15, Nitra Invest announced that it was withdrawing from the contract, stating that it did not want any further suspicions to affect its name.

Prime Minister Iveta Radičová and Mikloš, both members of the SDKÚ, later clashed head-to-head over the fate of Mikulčík, with Radičová calling on Mikulčík to resign and Mikloš, who had appointed him, saying he saw no reason for the tax chief to go. The stand-off raised concerns among the other ruling coalition parties and prompted speculation about a possible power struggle within the SDKÚ. On April 19 SDKÚ leaders appeared to agree that Slovakia’s public-finance watchdog, the Supreme Audit Office (NKÚ), would decide his fate via an audit of the deal.

However, on April 20, Radičová was late arriving at a regular session of cabinet and confirmed that her tardiness was related to Mikulčík’s continued presence. Asked if she had threatened to resign over the affair, she stated: “I have unambiguously said that I will not lead a government over which such a shade is hanging.” Mikulčík resigned the same day.



The analysis



The ruling coalition originally said that political responsibility for the office leasing case lay with the SDKÚ.

However, in late April, the other coalition parties asked to see the analysis that the Tax Directorate had elaborated and which the SDKÚ had used in its defence of the rental plan. The analysis advocates the option of moving into a shared building, as opposed to investing in the reconstruction of its existing facilities.

Kollár said that, among other things, the projected €5.5-million cost of reconstruction of the existing buildings was not verifiable, and added that the analysis was elaborated for only a 5-year period. Kollár argued that the costs of reconstruction should not have been included as a cost item in the year in which it was incurred but should have been re-calculated over a period of 20 years, with a 5-percent annual amortisation rate, the Sme daily reported.



Mikulčík rehabilitated?



Mikloš has meanwhile picked Mikulčík to serve as an adviser on his project to unify tax collection, but neither the details of his status at the ministry nor his eventual pay are yet known, Sme reported.

Political analyst Juraj Marušiak interpreted Mikloš’ move as a message to Radičová that he will continue to do as he pleases.

“The appointment of Mikulčík to the post of adviser is a negative gesture towards Radičová,” said Marušiak, as quoted by the TASR newswire. “The finance minister is letting Radičová know by this move that he doesn’t agree with the stance that she took in the case of the Košice rental deal.”

The selection of advisers is fully within the competence of individual ministers, Radičová said after a Coalition Council session on May 2. Mikulčík is expected to serve as an adviser on UNITAS, a €22-million tax unification project being undertaken by IBM. On May 4 Sme reported that the Finance Ministry has not disclosed a list of sub-contractors to the project. Slovak media speculated that the firm CSC Computer Sciences, where Mikulčík has in the past served as an authorised representative, was among them. Mikloš said that it is the business of the main supplier to choose sub-contractors, Sme wrote.


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