BRATISLAVA, April 7, (WEBNOVINY) — The government will have to find additional millions of euros within the state budget in the upcoming years. According to the presented draft amendment to the reform of taxes and payroll levies, the principle of budgetary neutrality will probably not be observed, while the Finance Ministry estimates a shortfall in revenues of public funds in line with the ESA95 methodology of EUR 59.9 million next year. In 2013, the shortfall is projected at EUR 29.7 million and the next year at EUR 48.5 million. The Finance Ministry’s spokesman Martin Jaros said for SITA news agency that the department refuses to increase the deficit, so the shortfalls should be covered by cost cuts
Implementing the reform as agreed upon by coalition leaders would also mean changes in funding regional self-governments, the state-run social security provider Socialna Poistovna, and health insurance companies. Due to the reform, the revenues from social and health insurance contributions are to decrease, which should be compensated by a higher collection of personal income tax. Next year, Socialna Poistovna’s revenues are expected to decrease by EUR 1.4 billion, while revenues of health insurers should drop by EUR 238.1 million. On the other hand, personal income tax revenue is to swell by EUR 1.6 billion.
In line with the current model, almost 94 percent of the personal income tax collection is transferred to self-governments’ budgets. The state may have to change the distribution key if it wants to keep some of the increased revenues, which the Finance Ministry also confirmed. Details have yet to be discussed between the Cabinet and self-governments. Michal Kalinak, spokesman of the Association of Slovak Towns and Villages (ZMOS) told SITA news agency that they would not accept less funds than they have at present.
The shortfall of revenues of Socialna Poistovna and health insurers is to be covered by increased transfers from the state budget.
Following the negotiation marathon lasting several weeks on the shape of the prepared reform of taxes and payroll levies coalition parties agreed on changes to bring a major simplification and reduction of administrative burden. The original plan of the Finance Ministry, however, was to implement fiscally neutral solutions.
SITA