Slovakia falls in tax ranking

The high tax and contribution rate pushed Slovakia down.

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Slovakia recorded a year-on-year drop by seven places to 55th out of 190 countries in the Tax payment ranking compiled by the PwC consultancy and the World Bank Group which gauges the ease with which taxes are paid. Slovakia’s ranking decreased even though all its parameters stayed the same, mostly because other countries have made significant progress.

Related articleIt takes companies 192 hours to fulfil their tax duties in Slovakia Read more 

The ranking is based on four indicators: Total Tax and Contribution Rate (TTCR), time to comply, number of payments and post-filing index and the state of legislation as of December 31, 2018.

Among the EU countries, Ireland, Denmark and Finland made it to the top ten, with Estonia, Latvia and Lithuania placed in the top twenty.

“The most negative influence factoring into Slovakia’s ranking is its sixth highest total tax and contribution rate among the EU and the European Free Trade Association (EFTA) countries, which equals 49.7 percent, 11.4 percentage points above the EU and EFTA average of 38.3 percent,” PwC Slovensko wrote in its press release.

Christiana Serugová from the PwC tax consultancy department believes that Slovakia should draw inspiration from the Baltic states, the reforms of which, along with their digitisation of tax administration, propelled them to the top of the chart.

“Aside from the continuing digitisation of tax administration, the reduction of the total tax and contribution rate and simplification of the whole tax system would contribute to improve Slovakia’s ‘tax mark’,” said Serugová, as cited in the press release.

Within the Visegrad Group, the Czech Republic stagnated within parameters and saw its place drop from 45th to 53rd, Poland fell from 69th place to 77th. Hungary was the only Visegrad Four state that made progress, advancing from 86th place to 56th.

Poland and Hungary find themselves at the bottom of the list in terms of the hours needed to comply with tax obligations - 334 and 277 hours, respectively. Along with Bulgaria (441 hours), these figures are the greatest within the EU and EFTA. In comparison, firms need 50 hours to comply in Estonia and 192 hours in Slovakia.

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