Slovakia's
new center-left government has unveiled plans to consolidate the eastern
European country's public finances by doing away with a business-friendly flat
tax. It's an attempt to arrive at more social justice.
The Slovak
government said on Friday it would raise taxes for rich individuals and
companies to bring down its budget deficit. It was aiming to scrap a
pro-business flat tax in favor of higher rates for the more affluent in
society.
"We're
not doing this because of Brussels, we are doing this for ourselves, so that
Slovakia can more easily raise funds on financial markets," Prime Minister
Robert Fico said in a statement in Bratislava.
Fico had
long vowed to eliminate the current 19-percent flat tax on personal income. The
proposal essentially adds a 25 percent rate for those who earn more than 33,000
euros ($43,600) a year. He had also floated the idea of imposing a 22 percent
tax on wealthy companies, including monopolies, banks and telecommunications
firms.
Sticking to
EU rules
"The
key goal is to trim the public deficit under 3 percent of gross domestic
product in 2013," the government's policy statement said. "The
government refuses to see higher consumption taxes as the only measure to raise
budget revenue."
Vladimir
Vano, Volksbank chief analyst, was skeptical about the efficiency of a wealth
tax on companies.
"The
scrapping of the flat tax may have more of a declaratory effect rather than a
real one, because the corporations affected will be able to find a way to avoid
paying higher taxes," Vano told the AFP news agency.
Slovakia
joined the European Union in 2004. Growth in the country is forecast to top the
eurozone at 2.3 percent, after logging 3.3-percent growth in 2011. However, the
eastern European nation's export-driven economy makes it vulnerable to any
wider slump in the region.
hg/sms (Reuters, AFP)
Related Articles:
Dutch crisis: Parties agree deal on budget cuts
Czech government survives confidence vote
Dutch crisis: Parties agree deal on budget cuts
Czech government survives confidence vote
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.