Business News

Govt Plans New Revenue-Side Measures

Ljubljana, 25 April (STA) - The government has been criticised by the unions for failing to match budget expenditure cuts with revenue-side measures, but the coalition announced Wednesday that new measures, including higher taxes, were already in the pipeline and would be put in place after the 2012 supplementary budget is adopted.

The omnibus bill on the balancing of public finances involves five revenue-side measures: taxation of extraordinary profits from land use changes; a special tax on high-value real estate, higher capital gains tax, a tax on luxury boats, and higher taxes on high-end cars.

Additionally, the government plans to introduce a tax on financial transactions, Democrat (SDS) MP Andrej Šircelj told the press today. This will have the biggest fiscal impact among the proposed measures as "the tax base is broad".

A new income tax bracket for the highest earners will be set at between 45% and 50%, according to Marija Plevčak of the Pensioners' Party (DeSUS).

A law to that effect had already been sent to parliament but the coalition withdrew it in mid-April, arguing that negotiations on revenue-side measures between the government and the trade unions were still ongoing.

Another planned measure is improving the efficiency of tax collection, which means, among other things, loosening the provisions on tax secrecy. "There is no reason why those who don't pay taxes should remain anonymous," Šircelj said.

The tax procedure act will also be tweaked to allow the Tax Administration to confiscate the property of tax evaders in order to pay their tax debt, according to Šircelj.

A new law will be put in place to tax second homes of over 160 m2.

Meanwhile, a former official at the World Bank and advisor to the Slovenian government in 1991-1992 rejected the notion that austerity was bad for growth.

Boris Pleskovič told a business meeting organised by the coalition New Slovenia (NSi) that a balanced budget was the necessary first step on the road to recovery.

He pointed to Asian countries, in particular China, which have had budget surpluses but nevertheless high rates of growth.

"If we save, everyone is more cautious about where the money is channelled...It will be easier to kick-start growth when we show that we can be prudent with out money", he said.

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