BRATISLAVA, October 22, (WEBNOVINY) — The Association of Employers of the Slovak Republic (AZZZ) proposes instead of the planned increase of some excise tax rates, a temporary increase of the value-added tax (VAT) from the current nineteen percent to 21 percent. AZZZ Vice President Rastislav Machunka further told Friday’s news conference that the two-point increase of the VAT rate instead of the already approved one-point increase would make it possible to refrain from some problematic austerity measures proposed by the government, such as the cancellation of the tax relief for the so-called red diesel that farmers can buy for their machines at lower prices, the increase of the excise tax on beer and energy taxes, or paying payroll levies also for contributions paid to the third pension pillar paid by employees. If the VAT rate was increased to 21 percent, it would bring additional EUR 180 million to the state budget. “It is three-times more than what the problematic other measures would bring”, stated Machunka.
The AZZZ vice president is also opposed to the government’s decision to increase the minimum wage by three percent to EUR 317 as of next year. The association was asking during negotiations of social partners to keep the minimum wage at this year’s level of EUR 307.7. “The minimum wage in recent years has been growing faster than labor productivity,” employers claim. The minimum wage increase will mostly concern people who are hard to employ and regions with high unemployment, employers say.
AZZZ President Tomas Malatinsky has welcomed the plan of the government to introduce regionally differentiated minimum wages. ”Differentiating minimum wages according to regional conditions on the labor market will improve flexibility of employers considering wages and will support creating new jobs in regions with the highest unemployment rate,” suggests Slovakia’s National Reforms Program 2010. The Finance Ministry presented this program for interdepartmental review. Among Slovakia’s regions, the parity of minimum wage to median wage is highest in those with highest unemployment. Such situation can hinder wage flexibility, increase unemployment and decrease employment growth, states the material.
SITA