The Finance Ministry completed the first round of talks with stakeholders in mid-March, with the second round scheduled to begin next week.

The fresh blueprint includes some solutions proposed by businesses and some by trade unions, the aim being to find broadly acceptable solutions.

In a nod to businesses seeking lower taxation of highly skilled staff in order to increase take-home pay, the ministry proposes several variants of income tax cuts.

Two proposals involve the introduction of a new tax bracket coupled with the lowering of tax rates, which would create a tax shortfall of around EUR 90m.

The third proposal would simply raise the thresholds for existing tax brackets, which is estimated to reduce budget receipts by under EUR 15m per year.

But income tax tweaks are only one alternative: the proposal also involves either reducing taxes on pay bonuses by partially waiving social contributions on such payouts, or increasing incentives for profit sharing.

Additionally, the treasury said it was also willing to study proposals by trade unions and business on issues such as the tax treatment of goodwill, and employer contributions for the promotion of workplace health and worker insurance.

The tax shortfall created by any of the proposals would be offset by an increase of the corporate income tax to 20% from 17%, whereas tax credits for R&D investments would remain untouched, a key demand by business.

The blueprint, unveiled yesterday, pursues the objective of revenue-neutral tax changes. Finance Minister Dušan Mramor has made it clear the treasury cannot afford a revenue shortfall as it tries to consolidate public finances.

The proposed measures constitute partial concessions to trade unions and companies, but given the positions that the interlocutors have staked out, the next round of talks is likely to be heated.

Earlier this week the ZSSS, the biggest trade union association, for example demanded that the corporate tax rise from 17% to 20% immediately and eventually to 23%.

The Chamber of Commerce and Industry (GZS), on the other hand, has insisted that there should be a cap on social security contributions.

Judging by their proposals put forward by the negotiating partners, consensus seems likeliest on a rejigging of the tax brackets.

However, the first two Finance Ministry proposals regarding tax brackets would benefit mainly those with significantly above-average wages, the third proposal (the raising of thresholds) is, however, more in tune with trade union demands.