The Call from Business to Withdraw the Mini Tax Reform

The Slovenian Business Club, the Chamber of Craft and Small Business of Slovenia, the Association of Employers of Slovenia, the Employers’ Association of Crafts and Entrepreneurs of Slovenia GIZ, and the Chamber of Commerce and Industry of Slovenia repeated their call to the government to withdraw the suggested changes to tax legislation which will, in the form in which they are suggested, have a devastating effect on the Slovenian economy and undoubtedly push Slovenian workers into an even worse competitive and social position.

Representatives of the SBC from various fields have played an active role in the preparation of tax changes and flexible legislation of the labour market in the last eighteen months. We have also prepared proposals for specific actions for the improvement of competitiveness of the Slovenian economy. The goal of all our talks, as much with representatives of the government as with the political parties, ministers, and representatives of unions, was primarily the taxation rewarding of successful workers, relief for the most productive class in the economy, and a flexible labour market which would enable speedy recruitment of motivated and the quick firing of unmotivated workers. In this respect we have placed special attention on the young and educated because we do not want them leaving Slovenia with the great knowledge which they have acquired with our taxpayers money but now seek employment abroad.

The proposed tax reforms actually mean a step backwards since they burden companies with an additional 2% in income tax, while the rewarding of successful workers is far from what we have suggested about the 13th and 14th salaries, which were to be schedularly taxed by 25% as is income tax. The change in the income tax scale has also obviously succumbed to the demands of the unions and does not abolish the 50% income tax class, even though we all know it was accepted only as a temporary measure. We also find that things revolving around the speed of firing unmotivated workers and hiring ones who are motivated do not move in the direction of comparable proactive European economies with which our companies compete. Those countries which follow the needs of their economies have started to overtake us – from the left as well as from the right.

The entrepreneur Igor Akrapovič confirmed that they have conferred about the potential tax changes to boost the competitiveness of the economy with the Ministry of Finance but the ministry has not accepted any of their suggestions. “We have not gained any ground but, ironically, we did gain an increase in the income tax rate for legal persons by two percentage points,” said Akrapovič who was very critical of the proposal which has reached the stage of approval by the National Assembly. “This is a proposal that is no longer acceptable to anyone,” he added.

The President of the SBC Marjan Batagelj hopes that they will be invited again for a new round of talks next week. In conclusion he summarised the thinking of one of the Club’s members and thus conveyed the way exporters feel about the conditions in place now. »Our company is 95% an export company and we are facing ever fiercer competition abroad. Unfortunately, due to continually greater obligations towards the greedy state, Slovenian manufacturers are less and less competitive. If the state really wants to encourage economic growth, it should think twice about where the current path is leading and finally let us work in normal conditions.«

It is obvious that the political will with a strong aftertaste of unionism is stronger than the formation of conditions for a competitive economy which creates and pays excessively high revenue charges. It seems that the government forgets that it is business that enables public health care and schooling as well as the salaries in the public sector through the payment of taxes.