Proposed measures for reducing bureaucracy in tax, economic and environmental affairs
Ivan Simič, chair of the government’s strategic council for reducing bureaucracy, today unveiled the measures proposed in a number of areas.
There are 28 proposals in the first package, 16 in the second and 30 in the third. The first two packages were presented in detail, while the third package, which in Mr Simič’s opinion is highly specific, can be better understood via debate over the coming weeks. The proposals were also presented at the coalition summit at Brdo pri Kranju, and coordination will begin with the government and the finance ministry. Several of the proposals could be introduced by the end of the year, and some next year, after all deadlines for submitting the various reports have passed, said Mr Simič.
Responding to concerns as to what revenue loss to the budget would be caused by some of the proposed allowances, Mr Simič said that there are no precise calculations. He mentioned the introduction of a sixth band of personal income tax, where a positive effect would be achieved for every person that remains in the country. The calculation for net earnings of EUR 3 million shows that EUR 1.5 million of personal income tax would be payable under the old system, while under the new proposal the tax would amount to just over EUR 700,000. With regard to the cut in capital gains tax from 27% to 25%, numerous dividends are not being paid out because there is hope of a tax cut. In general it is the case that the lower the tax, the more dividend payments are made. The allowances in the introduction of the social security cap will lead to a loss, but the aim is for certain multinationals to return to Slovenia. A comparison of net wages paid to an employee in Belgrade and an employee in Ljubljana shows that on a gross wage of EUR 10,000 the net wage paid in Serbia would be just over EUR 3,700 more than the net wage in Slovenia.
Setting the social security cap at EUR 6,000 is based on an estimate rather than calculations, but for the sake of comparison the figure in Austria is EUR 5,500. In setting the amount the aim is to balance the loss of budget revenues against the impact on individuals.
A reduction in normalised expenses from 80% to 60% has been proposed for sole traders paying normalised expenses, which would alter the effective income tax rate from 4% to 8%, which is still low.