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Creating jobs no longer required for government support of companies

Creating new jobs is no longer the gold star; support for investors should change into more directed support to reduce regional disparities and increase the economy’s competitiveness.

Illustrative stock photo(Source: TASR)

Creating jobs in manufacturing will no longer be a condition for winning state investment assistance. This is one of the main changes brought by a revision to the law on regional investment assistance, approved by the cabinet on November 8. The draft law further toughens the evaluation of investment plans, brings more transparent conditions for granting investment aid, tightens the conditions for their implementation, and introduces a strict definition of steps of the state administration bodies in the event of their breach. The revision means a shift from flat support for the creation of new jobs to more addressed support to reduce regional disparities and increase the economy’s competitiveness.

The revision still needs to be passed by parliament to enter into force by April 2018. It will replace the law from 2008.

“Primarily we want to push new investors to invest in the north, east and south of Slovakia,” said Economy Minister Peter Žiga after the cabinet session as cited by the SITA newswire. “The second basic point is that we will try to offer investors arriving in Slovakia to invest here support in not in cash but rather tax reliefs and we will push them into investing into technologies with higher added value.”

The most significant changes include the omission of the requirement to create jobs in industrial production. When it comes to technology and business service centres, the condition of having a certain ratio of jobs for people with university education has been replaced by a condition of paying higher salaries than the district average, reads the explanatory document from the Economy Ministry as cited by the TASR newswire.

Meanwhile, investment aid should be redirected to “less developed regions of Slovakia, considering also the changing needs of investors”, progressive technologies and activities with high added value.

The currently valid law on investment assistance valid from 2008 has been revised 11 times. During this period of time, both Slovakia’s economy and the global economy have undergone significant development. As a consequence, the current wording of the law does not respond either to the new needs of Slovakia’s economy nor the new needs of possible as well as established investors, writes the Economy Ministry.

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