Under the proposal concerning the 2016 and 2017 tax years, the third tax bracket would apply for annual pay in excess of EUR 20,400 and no longer EUR 18,960, according to the Government Communication Office.

The additional fourth tax bracket for top earners, introduced in 2013 as an effort to bring the budget deficit to below 3% of GDP, remains unchanged. It envisages a 50% tax rate for annual pay in excess of EUR 70,907.

The government said the aim of the change was to unburden the people receiving monthly pay that is 50% higher than the average. So far, a 41% tax rate applied for them.

According to 2013 data on income tax, the change will affect about 2% or 20,400 Slovenians. But indirectly all those with higher annual pay will also be affected, which puts the total figure at 114,740.

The Finance Ministry expects the measure not to affect the budget or any other public funds.

The motion will be fast-tracked through parliament so as to take effect as of 2016.