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Tax collection rate significantly improves

SLOVAK state will collect €250 million (i.e. 0.3 % of GDP) more this year than it had forecast in June. In 2016-2018 income should total €337 million (0,1 % of GDP) against previous estimate.

Slovak Finance Minister Peter Kažimír (Source: Sme)

This stems from the latest tax prognosis published on October 1 by the Financial Policy Institute (IFP) of the Finance Ministry (MF).

“The continued recovery of the labour market, growth of government investments and the preliminary consumption of the government have together with a better success rate of collection, all been reflected positively in 2015 tax collection,” ministry analysts explain, as quoted by the TASR newswire. “In the forthcoming years, the growth of tax revenues will be propelled by more efficient collection, specifically of levies, corporate tax and excise duty on mineral oil.”

The positive impact of improved tax collection for the period 2015 to 2018 represents €701 million (0,2 % of GDP).

Taking into account the positive development of levy revenues due in the year which is reflected in the whole horizon of the prognosis, is the reason for the better collection, according to the IFP. “Also the continued change in long term trend of success rate for collection and the stabilisation of effectiveness of tax collection on mineral oil which we managed to transform into more optimistic expectations for its further development,” analysts opine.

The last nine quarters saw stability in the success rate of VAT collection and this is expected to continue at least until 2018.

The recent ministry calculations foresee for the years 2015 to 2017, €738 million more for public administration in collected resources (for 2016 €538 mil.  and for 2017 €671 million, the SITA newswire wrote.  

In the next few years, the correction of the economy’s growth will have inverse influence, especially due to dampened development of prices, SITA wrote. The only exception is the growth of salaries and employment. 

Topic: Economics


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