The Slovenia Times

Minister hints no tax reform without business support


He made the comments on Thursday as pressure mounted from business associations against the proposals.

The government is willing to revise some of the solutions in the planned tax reform, especially as regards the cutting in half of tax breaks for investment in research and development, Počivalšek told the STA.

Responding to the criticism from business, Počivalšek said that the government "will not press ahead with the changes without the support of business. I can give you my word."

He said the government was focused primarily on providing incentives to exporters, which generate 80% of the country's GDP. To achieve this, the aims are increasing flexibility on the labour marker, reducing red tape and cutting labour costs.

The proposals in the "mini tax reform" are focused on the last aim through a proposed reduction of the tax burden on performance bonuses, said Počivalšek.

However, business have complained that the reform only further complicates an already complex tax code and that the proposed tax reductions have been crafted at the expense of existing tax breaks, with the net effective being negative for businesses.

Increasing the pressure on the government to withdraw the proposals, representatives of the country's employers in the Economic and Social Council announced today that they would not attend a planned meeting of the industrial relations forum dedicated to the reform scheduled for tomorrow.

The session was subsequently cancelled, with the Finance Ministry regretting the move.

The meeting has been viewed as an opportunity to try and sort out differences on the proposals, especially as the trade unions also have complaints about a failure to reduce taxes on the middle class.

The Finance Ministry, which has crafted the reform proposals and sent them into a ten-day consultation period expiring tomorrow, responded by calling on business representatives to engage in dialogue.

Joining the complaints by business over the reform today was the American Business Chamber in Slovenia, which said that the reduction in tax breaks for research and development would eliminate one of Slovenia's main competitive advantages.

"This proposal endangers the Slovenian companies which act as research and development hubs for international corporations," Amcham Slovenia said.

Like the numerous other business associations before it, Amcham said that tax incentives for performance bonuses would not make up for what is lost in competitiveness due to a decline in research and development.

It also argued that the proposed solutions for enabling a more competitive pay policy through reduced taxes on performance bonuses were overly complicated and bureaucratic.


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