BRATISLAVA, September 27, (WEBNOVINY) — The Slovak government will have to look for additional millions of euros in order to squeeze the general government deficit below three percent of the gross domestic product (GDP) next year. According to the latest tax prognosis of the Finance Ministry, revenues next year will be by EUR 233 million lower than the draft general government budget estimates. Finance Minister Peter Kazimir underscored that observing the three percent cap on the deficit remains an absolute priority that will be maintained. He, however, rejects further tax hikes.
The Finance Ministry has only a few days left to suggest additional consolidation measures. On October 10, the Cabinet is scheduled to debate the draft budget for next year. The minister has not yet said what steps will be taken. „I, however, guarantee that we will not propose raising taxes in submitted drafts on the income tax,“ Kazimir told the press on Thursday, adding that most likely expenditures will have to be curtailed further and non-tax revenues increased. Self-governments should embark on austerity plans, too. „I have no other option of how to restrict expenditures. We will turn to mayors and county heads to respond to the development of their revenues, too,“ Kazimir added.
The reason behind the worsened prognoses are new data supplied by tax offices. They found out that the collection of corporate income tax last year was lower by EUR 80 million than previously declared. The reduced basis will thus reflect in lower collection in the following years, too. According to Kazimir, this will mean admitting before European institutions that Slovakia’s state budget deficit last year was higher than 4.8 percent of GDP. The minister went on to say that the information will be communicated to the EU Statistical Office Eurostat, while the deficit will be revised upward, close to 5 percent.
SITA