Government to reduce VAT if deficit under 3 percent, Fico says

If the state budget deficit drops below 3 percent of GDP, the VAT will drop from current 20 percent to 19 percent, as it is stated in the relevant legislation, said Erik Tomáš, the Government Office spokesman. Tomáš was responding to news reports that said the government may introduce legislative changes seeking to maintain VAT at its current level despite the potential drop in deficit under 3 percent of GDP, the TASR newswire reported July 26.

If the state budget deficit drops below 3 percent of GDP, the VAT will drop from current 20 percent to 19 percent, as it is stated in the relevant legislation, said Erik Tomáš, the Government Office spokesman. Tomáš was responding to news reports that said the government may introduce legislative changes seeking to maintain VAT at its current level despite the potential drop in deficit under 3 percent of GDP, the TASR newswire reported July 26.

“The official stance of the government, repeatedly confirmed in previous period by the Finance Ministry, still holds true,” Tomáš said, as quoted by TASR.

The public deficit is expected to fall in 2013, which means VAT might drop in 2015. The legislation promising the decrease in VAT was ushered in by former Prime Minister Iveta Radičová’s government in 2011 as a temporary measure, until the deficit was stabilised.

If VAT is reduced back to pre-2011 level, it would amount to a drop of some €180 million in state revenues annually, TASR wrote.

Source: TASR

Compiled by Radka Minarechová from press reports

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