Coronavirus crisis will reduce tax incomes

The incomes are projected to drop by nearly €3.1 billion this year, according to the recent IFP prognosis.

Illustrative stock photoIllustrative stock photo (Source: SME)

The coronavirus pandemic will have a negative impact on the collection of taxes and payroll levies.

While in 2019, the income from taxes and payroll levies rose by 5.7 percent, this year they are expected to drop by 6.9 percent, the main reason being the drop in Slovakia’s economy.

This stems from the recent prognosis of the Institute for Financial Policy (IFP), running under the Finance Ministry.

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“The drop in income will also be deepened by the economic measures to mitigate the impacts of the coronavirus on the Slovak economy,” the prognosis reads.

Incomes should be revived in 2021, together with restored economic activity growth.

Corporate taxes and VAT to drop the most

Compared with the February prognosis, i.e. before the coronavirus outbreak in Slovakia, incomes are projected to drop by nearly €3.1 billion this year.

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