State will collect more on taxes

The Finance Ministry’s analytical body improved its forecast due to current tax and levy revenues as well as a new macroeconomic prognosis.

A group of 13 business organisations and chambers of commerce put together 20 recommendations for politicians in Slovakia in mid-November

A group of 13 business organisations and chambers of commerce put together 20 recommendations for politicians in Slovakia in mid-November (Source: Sme)

The state is expected to collect more money in taxes and levies this year and the next two years, with tax income estimated to see an increase of €150-255 million, or 0.2-0.3 percent of GDP in 2018-20. This stems from the updated tax prognosis published by the Institute for Financial Policy (IFP), running under the Finance Ministry.

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IFP revised its estimate for tax and levies upwards compared to September 2017 since it expects salary and household consumption growth to be positively reflected in public sector incomes, the TASR newswire reported.

Read also: Slovak economy slightly accelerated by end of 2017 Read more 

“Additional incomes will mainly go to social insurance provider Sociálna Poisťovňa and public health insurance, while state coffers will benefit from the stronger market to a smaller extent,” IFP stated, as quoted by TASR.

IFP revised its September estimate chiefly based on current tax and levy revenues, as well as a new macroeconomic prognosis. The higher revenues can mainly be ascribed to the positive situation on the labour market and growing household consumption.

“Legislative changes to produce a gradual exemption for 13th and 14th salaries from taxes and levies will have a negative impact on incomes,” IFP added, as quoted by TASR.

Read also: Workers will earn more for night shifts, weekends and holidays Read more 

Conversely, the level of efficiency when collecting VAT revenues continues to improve. The estimated stronger growth of the Slovak economy has increased incomes across the updated prognosis.

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IFP analysts ascribe higher incomes chiefly to higher salaries and employment growth. The salary prognosis has already factored in increases in bonuses for night, weekend and holiday work. Growth in VAT incomes is chiefly driven by stronger household consumption.

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