Tax changes coming - budget neutral

Robert Fico seems to want to change how the weight of funding the budget are spread among taxpayers. He seems to want to reduce retail taxes and shift the burden onto the banks who have had record profits.

Tentative signs of a reduction in VAT (retail taxes/indirect taxes) along with the abolition of one tax rate fits all were discussed by the Prime Minister of Slovakia Robert Fico recently.

The very rough translation is that he favours a reduction of value added tax (VAT), but with the condition that a progressive income tax would replace the current flat rate.

"I am ready to do so," said the Prime Minister on Thursday in a speech.

Fico also agrees with the reduction in excise duty on fuel, subject to the introduction of additional taxes on banks and the privatized companies.

"The only way to combat the world financial crisis is solidarity - international and domestic. Everyone must contribute in some way and we will do everything possible to maintain a civilised social standard in 2009"Fico noted.

The government he will not tax benefits, contributions or gifts at birth of a child (tradition in Slovakia), or impose other such burdens.

"I'm sorry to say there that there is no way to change the Labour Code, to reduce labour taxes and levies given the situation" said Fico. The government of Robert Fico is ready if necessary to allocate additional resources to mitigate the impact of economic crisis on the Slovak economy, and is continuing the checks of public spending for areas of additional cuts.

"I am glad that our people are no longer just cheap workforce. I am glad that there are other factors we can offer foreign investors. Slovakia's notable political stability, Schengen membership, the euro, the good business environment, a skilled workforce with progressive values and a strong work ethic, are important for attracting investors to the territory of Slovakia," said Fico .