Every person pays nearly €6,000 to state

The INESS think tank issued a bill showing how the state spends money we pay via taxes and levies.

(Source: Sme)

One Slovak annually pays to the state €5,657 on average on taxes and levies. The state uses the biggest part of this sum on pensions, to which one person contributes €996 on average. This stems from a special bill, the so-called bill for state services, issued by the Institute for Economic and Social Studies (INESS) think tank in cooperation with the Sme daily.

Though it may seem that we contribute much to pensions, the fact is that the number of pensioners increases every year, which brings also higher spending. The number of seniors increased by 15,000 year-on-year, INESS analyst Radovan Ďurana said.

Moreover, the state increases the payments on pensions also due to the increase in the average sum pensioners receive. Compared to last year, it grew by €11.

This means that this year every person will contribute to pensions €60 more than in 2015. Last year’s increase was €51, which suggests that the tempo of the increase in spending on pensions accelerates every year. This confirms the warnings of experts that the demographic development will cause the biggest financial problems in the future.

“Also this proves it is necessary that when discussing the valorisation of pensions, politicians will take into consideration its significant influence on pension spending,” Ďurana said, as quoted by SITA.

He added that further measures which would slow down the increase in spending on pensions should be adopted.

The INESS bill also shows that every person will pay €400 more this year than in 2015. The state, for example, plans to use more money on its so-called reserve. Every person will contribute €130, which is by €25 more than last year.

A similar sum will be used to support housing, the development of regions and the informatisation, Sme wrote.

One of the reasons for the increase in the payment to the reserve may be the arrival of new carmaker, Jaguar Land Rover, analysts say. According to the current information, Slovakia will pay for its arrival some €500 million.

The fact is that the money to the reserve was part of the changes which Smer pushed through in the last minute. At the time, the extra money was not backed by any analysis of independent experts, Sme reported.

The sum is even higher than expected by the official tax prognoses which the experts of the National Bank of Slovakia, the Statistics Office or commercial banks described as realistic, the daily wrote.

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