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Firms reject higher surcharges

PAS Survey: State will benefit the most from higher surcharges

(Source: ČTK)

Reducing income and payroll taxes would be more beneficial for people than increasing surcharges for weekend, holiday and night work. This is one of the findings of the latest survey carried out by the Slovak Business Alliance (PAS). PAS executive director, Peter Kremský reported the results of the survey conducted from November 15 to 20. The survey was administered to 144 managers of predominantly small and medium-sized companies.

The survey showed that most firms that operate beyond standard hours use weekend and holiday labour, but around half of them also operate at night. Firms already pay surcharges for this kind of work, with many of them paying even above the framework set by law. Most businessmen oppose the introduction of surcharges for weekend work.

The respondents usually disagreed with the way in which surcharges are being increased.

“The problem is that the draft does not undergo interdepartmental review in that case,” said Kremský, as cited by the TASR newswire. “That would initiate a public discussion between the government and social partners, but unfortunately this does not happen.

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Entrepreneurs do not completely oppose mandatory surcharges. More than one third of the respondents were willing to accept the introduction of surcharges for night work. Conversely, almost two thirds disagreed. One in four entrepreneurs agreed with surcharges for holiday work, while almost three quarters were against it. The highest proportion of businessmen, almost 80 percent, opposed the introduction of surcharges for weekend work.

PAS points out that mainly the state will benefit from increased surcharges as it will increase its revenues, along with the revenues of the social security provider and health insurers. Employees’ salaries will go up significantly, which will also mean higher income and payroll taxes. Therefore, firms are concerned about the negative impacts of the measures, mainly referring to increases in labour costs and certain products, which will reduce the competitiveness of Slovak firms.

Businessmen unanimously agree that the income and payroll taxes of employees should be reduced. Almost 90 percent of those who took part in the poll called for this. In addition, they called for an improvement in the business environment, mainly through combating corruption, cronyism and red tape.

Kremský said that increases in the aforementioned surcharges would be reflected in higher costs.

“The state has the right to set conditions for this kind of labour, but it’s uncivilised to do so without holding a discussion with businessmen,” said Kremský. “If the state wants to contribute to employees in this way, it should also do so by reducing taxes and levies.”

In an amendment to the Labour Code, MPs of the ruling Smer party propose increasing surcharges for night work from 20 to 50 percent of the minimum wage as of May 2018. Surcharges for holiday work should go up from 50 percent of an employee’s average salary to 100 percent. Surcharges for weekend work should be introduced as well, amounting to at least 100 percent of the minimum wage.

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