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Cabinet ditches plan to alter funding of local authorities

Rules governing the distribution of tax revenues for local authorities will not change after all, after the cabinet withdrew a legislative proposal aimed at altering the pattern, the TASR newswire reported on Wednesday, November 16. The law has already passed its first reading in parliament; a final vote was expected to take place in late November.

Rules governing the distribution of tax revenues for local authorities will not change after all, after the cabinet withdrew a legislative proposal aimed at altering the pattern, the TASR newswire reported on Wednesday, November 16. The law has already passed its first reading in parliament; a final vote was expected to take place in late November.

If the law had passed its second reading, municipalities would have received income from a mix of taxes as of 2012 rather solely from income tax on individuals. The initiative was criticised by the Slovak Towns and Villages Association (ZMOS) and, following a series of talks with the government, it has now been dropped.

However, an agreement has been reached on modifying the share that municipalities receive from income tax on individuals. If no change had been introduced, municipalities would have received an extra 18.3 percent year-on-year in revenues from the tax, which led to objections from the Finance Ministry. It proposed that the amount rise by 3 percent year-on-year. Eventually an agreement was struck on upping the amount that municipalities receive by 7 percent. Local authorities will receive a fixed aggregate amount of funding next year of €1.263 billion.

Source: TASR

Compiled by Zuzana Vilikovská from press reports
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