The Slovenia Times

Row over capital gains tax escalates


In an open letter, the Slovenian Business Club urged President Borut Pahor, Speaker Dejan Židan, PM-designate Marjan Šarec and other heads of parliamentary parties to respond to attacks on entrepreneurs.

Pahor already invited the club's leadership to talks, which are to be held next week.

The club's board is headed by Marjan Batagelj, the owner of the company operating the Postojna Cave, while it also includes Igor Akrapovič of the namesake exhaust pipe maker.

The letter, read to reporters on Monday by the club's executive director Goran Novković, said that the club had been taken aback by the coalition's tax policy plans, mainly that capital gains, so far taxed based on a schedular system, would be included in the personal income tax base.

In response, Akrapovič decided to take out his company's profit in the form of dividends, and other entrepreneurs indicated similar steps, something that the club termed an act of "self-defence".

Akrapovič's move prompted an angry reaction from the Left, the partner to the incoming coalition government, with one of its MPs attacking the entrepreneurs on his Facebook profile, and offering nationalisation as a solution, along with a picture of the late Venezuelan leader Hugo Chavez.

MP Miha Kordiš asserted that Akrapovič and Ivo Boscarol, the owner of aircraft maker Pipistrel, were spreading lies about the Left's proposal because they do not want to share wealth "they usurp from the worker's hands and brains".

The Slovenian Business Club expressed shock at the "inciting rhetoric, spread of lies, indecent political culture, populism and unacceptable hate speech against entrepreneurs, and at open appeals to establish some other socio-economic system".

The club warned of the dangerous impact of such statements on the public opinion and of the confusion as to the values and goals of the incoming coalition that they create, demanding key officials to take a stand.

Speaking on behalf of PM-designate Marjan Šarec, his aide Vojmir Urlep said that some of the reactions to the guidelines set down in the coalition agreement were "premature".

"It would be right for the government to be inaugurated first before the prime minister and the relevant ministers can meet business representatives and respond to their queries and doubts," Urlep said.

He said that the contentious plans about capital gains should be viewed in the context of all measures, and that the coalition was also committed to creating a predictable, reliable and stimulating business environment.

Urlep, a former business executive himself, said that he believed the government would look for optimal solutions that would not place an unnecessary extra burden on business, while it would seek ways to meet the public sector's needs.

"If the implementation of such a guideline [i.e. for capital gains] was to cause great damage to business and jeopardise the high economic growth, there is no government that would take such a measure, because this would mean much less funds for the implementation of the government's other commitments."

The Slovenian Business Club said that higher company income taxes would halt development cycles at companies and that jobs would be created in other countries.

The club's executive director Novković said that Slovenian entrepreneurs had already received invitations from neighbouring countries to move there.

Jure Knez, a co-funder of the Trbovlje-based high-tech company Dewesoft, said that the coalition agreement filled them with despair, and that entrepreneurs' reactions were completely normal.

His company also highlighted the uncertainty about worker participation in profit, considering that the employees hold 15% of Dewesoft.

If the coalition agreement plans are implemented, "it's more worthwhile investing in a beer than in Dewesoft ownership", Knez said, adding that the employees were turning to him with questions.

Knez expressed the concern that many more young people would start a business abroad, wondering whether Slovenia wanted business initiatives and entrepreneurs at all under the new government.

Novković denied the allegation that the entrepreneurs' reactions had been motivated by a political party, arguing that the Slovenian Business Club was an independent organisation.

A reaction also came today from the leaders of the two large right-wing opposition parties, the Democrats (SDS) and New Slovenia (NSi).

Writing about the coalition agreement, Janez Janša said the SDS would do everything to stop this "lunacy". He is convinced the new government wants to shut down or drive away entrepreneurship.

The NSi's Matej Tonin said the NSi would always fight for entrepreneurship. He argued the demands and threats of the Left were hurting the economy as well as workers.


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