Under the legislative package confirmed Wednesday evening and slated for passage at the National Assembly plenary next week, the thresholds for all five brackets will be slightly increased and the general tax credit will rise.

In the second and third tax brackets, which cover mostly the middle class, the tax rate will drop by a percentage point.

Those on the minimum wage will see their earnings rise only marginally, while those on average pay can expect roughly EUR 150 more per year.

The original government proposal also involved a significant tax cut for the richest, as the threshold for when the highest, 50% tax rate kicks in, was to rise by over EUR 9,000 to EUR 80,000.

Bud amidst criticism, especially by the opposition Left, that this amounted to a generous handout to the richest, the committee set the threshold at EUR 72,000, about a thousand euro higher than now.

There are only about 3,900 individuals who fall into this tax bracket, or 0.3% of all income tax payers.

The income tax changes are coupled with higher capital gains tax, which will rise to 27.5% from 25%. This rate will also apply to rental income.

Additionally, companies will be subject to a minimum corporate income tax rate of 7%, as tax credits for investments and losses from previous years will be reduced.

The committee debate saw parties clash on taxes along ideological lines.

The Left unsuccessfully sought to withdraw the income tax changes altogether, arguing that the legislation would create a huge budget shortfall while doing too little to benefit the poorest.

The centre-right opposition, on the other hand, came up with amendments that would reduce the taxation of capital and accused the Left of "trying to banish managers out of the country", as New Slovenia (NSi) MP Jožef Horvat put it.

All opposition amendments were voted down.

And even an MP of the coalition, businessman Marko Bandelli of the Alenka Bratušek Party (SAB), wondered why the Left hated people with high pay "who push our country forward".

Robert Pavšič of the ruling Marjan Šarec List (LMŠ) countered that the government was heeding warnings by international organisations that labour is too heavily taxed and capital too little.

"The underlying purpose is to provide greater tax equality," he said.

The government had originally proposed a much more far-reaching tax reform package but the bills, first presented in February, got watered down due to GDP growth data and forecasts showing that economic growth is cooling down.

The amendment that would keep the threshold for the highest, 50% tax rate, virtually unchanged was met with disapproval by business associations, who will push for further cuts to labour taxation next year.

In a joint statement, the Chamber of Commerce and Industry, Manager Association, Slovenian Business Club, AmCham Slovenia and the German-Slovenian Chamber of Commerce noted that Slovenia's income inequality was the lowest in the EU, and decreased further recently.

They expect that with the amendment the situation will likely remain the same in the future.

Even though the top income bracket does not include all highly-skilled staff, it does include the top-notch staff companies need to develop new products and technologies, the organisations said.

"If even more of them start heading abroad, there will be fewer excellent products, fewer opportunities for higher pay, less tax revenue, fewer opportunities for higher pensions for more money for education, healthcare," they said.

They cited statistical data showing that the net outflow of high expertise from Slovenia in recent years was stronger than at the time of the deepest crisis in the country.

The associations said that they had backed the government-sponsored tax package as the "extreme limit of the acceptable", while the "last-minute" change was yet another example of the coalition's unpredictable conduct, which they said was in disrespect of its own coalition agreement and social dialogue.