BUSINESS IN SHORT

Mayors disagree with changes

MEMBERS of the Association of Towns and Villages of Slovakia (ZMOS) have rejected the Ministry of Finance’s proposed changes to the way in which Slovak municipalities are financed. They say that the state is trying to solve its problems by moving them on to the shoulders of citizens, the SITA newswire reported.

MEMBERS of the Association of Towns and Villages of Slovakia (ZMOS) have rejected the Ministry of Finance’s proposed changes to the way in which Slovak municipalities are financed. They say that the state is trying to solve its problems by moving them on to the shoulders of citizens, the SITA newswire reported.

“Financing [of municipalities] was agreed during the fiscal decentralisation of 2005, and now the government is trying to change it without agreement,” said the chair of ZMOS Jozef Dvonč, as quoted by SITA. “We would be happy if the government listened to our arguments and we could reach agreement on the way that villages and towns are enabled to perform their duties.”

At the end of September, the Finance Ministry proposed that finances provided to municipalities should be composed of several different types of tax, including the income taxes for personal and legal entities, the value added tax and all types of excise taxes. At the moment, municipalities receive money solely from the tax on the incomes of physical entities. Dvonč promised to try to persuade deputies, chairs of parties’ caucuses and also the speaker and deputy speakers of parliament to reject the proposed changes.

The financing changes have already been rejected by the heads of self-governing regions, who calculate that through this model municipalities will get €62 million less, the Sme daily reported. They have also threatened to close down schools and announce crisis regimes in protest. Moreover, they plan to address their complaint that the government has violated the international Municipal Charter to the European courts.

The Finance Ministry said that the changes for municipalities are necessary if Slovakia does not want to end up in the same situation as Greece, SITA reported.

Finance Minister Ivan Mikloš explained that through the new model municipalities will get three percent more money than they got last year. He stressed that the ministry is not trying to change the system of fiscal decentralisation.


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