BRATISLAVA, September 21, (WEBNOVINY) — Finance Minster Ivan Miklos assumes that the go-ahead to an earlier increase in the excise tax on tobacco products and the introduction of a bank levy as well as other measures will cover the gap in 2012 state budget revenues that are likely to occur after a revision of the macroeconomic prognoses for next year. Miklos presented this opinion after the Cabinet session on Wednesday that approved changes in excise taxes, the introduction of a bank levy and an increase in the contribution of power utility Slovenske Elektrarne to the National Nuclear Fund. Additionally, Miklos counts in revenue from the sale of digital broadcasting licenses and higher revenue in dividends from some state-run companies. These measures are expected to cover the shortfall in budget revenue assumed as a result of a deteriorated economic outlook, which the department estimates at some EUR 140 million.
The talks about the state budget, however, have not come to an end. The fiscal hawk of the Iveta Radicova Cabinet confirmed that individual ministries still demand a total of EUR 1.5 billion more for their priorities than the sum budgeted in the first draft. “As if we have preliminarily closed the debate on revenues today and now, we will continue debating the budget in the coming weeks, we will discuss expenses,” Miklos stated. A general government deficit at 3.8 percent of GDP remains a priority.
The ministers are expected to propose sources to fund their priorities, based on Miklos’ previous statements. Labor Minister Jozef Mihal reported that his party SaS would push for spending cuts rather than tax hikes. He indicated that reduction of social benefits could be another option, as well. “It is a very thorny and sensitive topic, on which I cannot decide on my own; it requires a nod from the entire coalition, but I personally can imagine reduction of some social benefits and their more efficient and purposeful use than at present, respectively,” Mihal stated, without elaborating.
The Finance Ministry submitted the first draft budget projecting revenues at EUR 15.27 billion but this paper did not stipulate a shortfall caused by slower economic growth expected next year. Expenses are budgeted at EUR 18.443 billion but the final figures will result from talks in the governing coalition. General government deficit is projected at EUR 3.172 billion, which would be a nearly 640-million-euro decrease versus the 2011 budget.
SITA