The End of Automatic Indexation of Income Tax Brackets to Inflation
The changes will become effective already for the 2013 income tax. This means that the 2013 income tax will remain unchanged for individual brackets compared to 2012.
The opposition objected to the changes, maintaining the scrapping of automatic indexation would lead to higher taxes. "The indexation is very necessary," said opposition Democrats (SDS) MP Andrej Šircelj.
He said that the series of tax hikes in the past months was making people angry, desperate and ever poorer. Marko Pogačnik, also of the SDS, said the government has stripped each family of an average Slovenian pay.
The government proposed the bill at the end of August saying it expects to rake in an additional EUR 30m per year as a result of the changes.
Finance Ministry State Secretary Mateja Vraničar said the changes had not bee accounted for in the 2014 and 2015 budget, which means that the budget gap will be EUR 30m smaller than expected.
Under the changes, the extraordinary indexation ratio will be defined in the budget implementation act.
Vraničar also said that the government will be able to launch indexation if it wants to. Indexation will however be obligatory when annual inflation exceeds 3%.
The changes are part of the commitments Slovenia made in the Stability Programme that was submitted to the European Commission in June.