Ljubljana, 29 April (STA) - The government endorsed on Thursday changes to three tax laws in a bid to prevent the effects of the financial and economic crisis and boost economic development and growth. The changes bring tax breaks for research and development and for employment of persons at a disadvantage in the labour market.
The changes to the personal income tax act, the corporate income tax act and the tax procedure act will abolish tax deductions on income from bonds and introduce new or expanding existing tax incentives, Finance Minister Franc Krizanic told the press Thursday after the government session.
Witholding tax on corporate income from bonds was pushing the prices of bonds issued by Slovenia-based companies up. The changes will thus make Slovenian banks and companies more competitive on global financial markets, the minister explained.
This will decease the need for state interventions in the financial sector, Krizanic is convinced.
The changes also propose new tax breaks for employment of persons at a disadvantage in the labour market, especially those under 26 and over 55 years of age who have been registered as unemployed for at least six months.
The taxable part of the income for such persons will be cut by 45% in the first 24 months after they are hired, Krizanic explained. He added however that the cuts would only apply to new hirings at companies, which means that the number of employees would have to increase.
The new legislation will also raise the existing 20% tax break on investments in R&D to 40%. Both changes will apply already for 2010.
The minister said the changes would not affect the national budget, but that they would hopefully help Slovenian companies to become more competitive on the global market.
He expects them to pass through fast-track procedure in parliament so that they would take affect already in mid-June.