The Slovenia Times

Crisis Tax Up to 5%


Stepišnik, addressing reporters after the session of the Economic and Social Council, explained that the crisis tax, one of the proposals in the draft Stability Programme, would be progressive and would affect all incomes, including pensions.

Gross pay amounting to half of the average pay will be taxed at the rate of 0.5%, average gross earnings at 1%, double the average pay at 1.5%, triple the average pay 2% and those exceeding that amount at the rate of 5%. Average gross pay in Slovenia was EUR 1497.55 in February.

The minister said that a final decision on VAT would be taken by the end of the year when it was clearer how successful Slovenia was in bringing down the deficit.

The government has not yet decided whether it will increase the reduced VAT rate, but an increase in the standard rate as of 2014 is a fact, according to Stepišnik. The government will decide on the amount by the end of the year.

The omnibus fiscal consolidation act of 2012 envisages a rise in VAT if the general government deficit exceeds 3% of GDP this year.

Stepišnik said the meeting at the industrial relations forum today did not discuss sell-off of state shareholdings in companies and banks. Nor has the government decided yet what will be on sale, but the decision should be known shortly.

The minister promised the government would try to take suggestions from today's discussion into consideration when finalising the documents, but would not say which proposals would be taken into account.

The ZSSS, the country's biggest grouping of trade unions, expressed harsh criticism of the draft Stability Programme. ZSSS secretary general Andreja Poje labelled the crisis tax as unacceptable, and, considering the lack of systemic measures, "dreadful".

She said the measure would only "stifle" consumption further and cited the same reason for the union's opposition to a rise in VAT, or any cut in pensions and social transfers.

Instead, the ZSSS proposes cracking down on informal economy, stiff fines for tax evasion, introduction of certified cash registers and a faster introduction of a real estate tax, which is not expected until 2015.

Employers were equally dissatisfied, with president of the Chamber of Commerce and Industry (GZS) Samo Hribar Milič complaining of a lack of measures to stimulate economic growth.

"Everything is directed in how they are going to raise revenue to fill up the budgets. By raising taxes on various levels, including excise duties, levies and contributions we'll probably take a wrong path. We made it very clear that this is not helping us and that we oppose it," Milič told reporters.

The Chamber of Commerce (TZS) again voiced its protest against the likely rise in VAT and other levies "which would only contribute to a further deterioration of the situation in the Slovenian economy".

"Additional cause for concern is the latest available data from the Statistics Office which show a continued fall in retail revenue," a release issued by the TZS reads, referring to a 10% year-on-year fall in retail revenue in real terms in March.


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