BRATISLAVA, September 21, (SITA) — The opposition party SMER-SD is opposed to further taxation of consumption and will, therefore, table two tax-related proposals in the coming days: a revision of tax income laws and a draft bill on levies imposed on selected financial institutions. SMER-SD leader Robert Fico estimated after a meeting of his party’s shadow cabinet that the two draft measures could save over EUR 330 million.
The opposition party has sent its tax levy proposal to the parliament twice, but it was rejected by the coalition. At its session on Wednesday, the Cabinet of Iveta Radicova, however, agreed to impose a 0.2-percent bank levy on selected liabilities [corporate deposits — SITA note] of bank houses. The revenue is projected at over EUR 41 million. “We will push for a much higher rate than the one proposed by the Cabinet,” said Fico. His party recommends a 0.7-percent rate of the levy that would raise about EUR 189 million. The Deputy Parliament Speaker maintains that banks post record profits and, therefore, can pay a higher levy.
Finance Minister Ivan Miklos countered that his ministry does not support a considerably higher levy on banks. “A bank levy at such rate could raise more money for the state budget during a short period but it would simultaneously disturb competition, the business environment and the image of the country and the damages would ultimately be much bigger,” announced Miklos, slamming the opposition’s proposal as unrealistic and populist.
The second initiative applies to the so-called millionaire tax. SMER-SD suggests a 25-percent tax rate on gross annual income of private individuals higher that EUR 33,000. The currently applied tax rate is 19 percent. SMER-SD Deputy Chairman Peter Kazimir reported that the higher tax rate would apply to some 25,000 people. Income of members of the Cabinet and Parliament should also be taxed at this higher rate. The party further wants to launch a 5-percent tax on dividends paid to private individuals. Companies with high income should be taxed, as well. Income exceeding EUR 30 million would be the tax base. As Fico pointed out, there are more than thirty such firms in Slovakia, and they would pay a 22-percent corporate income tax instead of the current 19 percent. Kazimir calculated that the three measures would direct EUR 149 million to the state coffers next year.
SITA