BRATISLAVA, April 12, (WEBNOVINY) — Entrepreneurs in Slovakia will probably not see any substantial reduction of taxes and payroll levies in future any time soon. This channel to increase competitiveness of the economy and improving the business environment is already significantly used up. “Space for further cuts of taxes and payroll levies is quite limited,” stated Finance Minister Ivan Miklos at the Views on Slovakia’s Economy 2011 conference on Tuesday. In his opinion, the tax-levy burden in Slovakia is one of the lowest in Europe.
However, space for improving conditions in Slovakia’s economy is, according to Miklos, quite large in the area of effectiveness of public administration. “The problem is ineffective public administration, as a result of which public services, provided by the public administration are of very low quality and insufficient,” he explained. If Slovakia wants to be able to compete and maintain low tax and levy burden, it has to significantly increase the quality, effectiveness and productivity of its public administration. As for the public administration, the pressure to change behavior, increase effectiveness, and effectively use its capacities was not sufficient. That is why in the future one of the highest priorities must be significant changes in this area. “This is connected to over-employment as well as real performance and effectiveness,” continued Miklos.
According to the finance minister as well as Prime Minister Iveta Radicova, the fundamental priority of the current government, however, remains consolidation of public finances, which is a necessary precondition for further improvement of the standard of living and competitiveness in the economy. “By 2013, we want to and we will reduce the deficit to under 3 percent of GDP,” Radicova stated.
The consolidation plans of the government were described as credible by the International Monetary Fund (IMF). After several days in Slovakia, the IMF stated that the planned extent of the consolidation in Slovakia this year, as well as the composition of measures, are appropriate. The goal of the government to lower the deficit of public finances under the Maastricht criterion of 3 percent of GDP by 2013 is considered credible and appropriate.
SITA