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Official Says No Financial Consolidation through Taxes

Portoroz, 25 May (STA) - Tax policy has an important role in government measures for medium-term consolidation of public finances, but the government has decided not to base consolidation on hikes in taxes, Finance Ministry State Secretary Mateja Vranicar said on Wednesday.

Vranicar's statement on the sidelines of a meeting of tax advisers in Portoroz comes after the Fiscal Council, a government advisory body, expressed concern about the state of public finances and proposed tax measures to tackle the problem.

The state secretary told the press that there was however some room for manoeuvring in tax policy, both in terms of boosting efficiency of tax collection and including certain activities in the tax base. "Limiting the grey economy is what I have in mind."

The Finance Ministry is preparing adjustments to the tax systems "in the sense of responding to individual irregularities which have been detected during the crisis" in order to change the behaviour of some groups of taxpayers.

Examples are value added tax (VAT) in connection with the prevention of defaults on payment and the planned tax on total assets of banks in an attempt to make banks give more loans to companies.

The ministry is also drafting changes to the acts on excise duty, VAT and corporate income tax, which according to Vranicar are only minor technical changes aimed at eliminating administrative barriers.

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