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State budget posts €952.7 million deficit in 1Q13

Slovakia's state budget posted a deficit of €952.7 million in the first quarter of 2013, which was 17.6 percent less than the deficit recorded in the same period of 2012, the Finance Ministry announced on Tuesday, April 2.

Slovakia's state budget posted a deficit of €952.7 million in the first quarter of 2013, which was 17.6 percent less than the deficit recorded in the same period of 2012, the Finance Ministry announced on Tuesday, April 2.

"State budget expenditures fell by €294.2 million (8.1 percent) year-on-year," said the ministry as quoted by the TASR newswire. Meanwhile, tax revenues rose by 37.5 million (1.9 percent) year-on-year. This development was mainly driven by an increase in revenues from corporate taxes and deduction taxes, which was partially offset by a fall in revenues from taxes imposed on private individuals, VAT and consumer taxes. Overall state budget incomes fell by €91.4 million (3.7 percent) in the January-March period. The reduction in expenditures was mainly due to a cut in those concerning social-insurer Sociálna Poisťovňa and a decline in ones related to the state debt.

The Hospodárske noviny daily wrote that although experts warned a few months ago that higher corporate income tax, which was raised from 19 to 23 percent as of January, will compel a portion of businesses to seek tax havens, the latest figures showed that only for the first quarter of this year, tax collected €75 million more from corporations. The economist of the Slovak Academy of Sciences, Vladimír Baláž, explained for the daily that the tax is still relatively low enough in Slovakia to be avoided by entrepreneurs. On the other hand, personal income tax and VAT collection are weaker against the previous year, by some €12 million in both cases. But companies and experts warn that the breaking point might still come, as the reduction of tax costs becomes relevant mostly towards the end of the year.

(Source: TASR, Hospodárske noviny)
Compiled by Zuzana Vilikovská from press reports
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