BRATISLAVA, November 18, (WEBNOVINY) — Opposition party SMER-SD unambiguously rejects planned changes to the income tax law proposed by the Cabinet, stated SMER-SD MP Peter Kazimir at the Parliamentary Finance and Budget Committee session on the draft amendment. As he added, the Cabinet often saves where the saving will not bring much gains, but will cause considerable harm to some groups of citizens. According to Kazimir, the draft legislation can be labeled as “cleansing“ from the viewpoint that it cancels existing exemptions in the tax system.
Branislav Durajka, State Secretary of the Ministry of Finance does not deny it is correct to label this legislation as a “cleansing amendment”. He argues that the individual tax exemptions lobbied for by different groups over years might represent large amounts of funds and thus might not be essential; yet the entire package is interesting. “When we abolish them, we will find out that we have [additional] 80 million euro and another 150 million euro in the following years,” he stated.
The Ministry of Finance admits some minor changes might appear in the amendment, concerning for example leasing or compensation of expenses on business trips. The allowances paid to employees with travel expenses could thus become voluntary, but would still be a tax expense. The Finance Committee advised Parliament to pass the amendment.
Within the draft amendment of the law on income taxes, the Ministry of Finance prepared repealing of a number of exemptions in income taxation. This should help consolidate public finances and improve the tax system. The new rules should come into force at the beginning of 2011. According to original estimates of the ministry, the drafted changes should earn the state 78.30 million euro next year.
The piece of legislation limits some advantages and exemptions from tax rules. Medical staff members will not be allowed to reduce their tax base by costs of specialized post-graduate education. The effective exemption from taxation with income of up to fivefold the subsistence level will be replaced by a fixed sum of 500 euro with selected income. The Ministry of Finance also suggests harmonizing the flat deductible expenditures of self-employed private persons earning income from business or self-employment to a single level of 40 percent.
SITA