STA, 28 July 2019 - The government has proposed a series of tax tweaks aimed at reducing labour taxation, coupled with higher taxes on capital, which would partly offset the loss of revenue. The rest is to be secured through more effective tax collection.
The Finance Ministry submitted the blueprint of the tax reform for public consultation on 22 June, and is accepting comments from stakeholders until 1 August after which it will compile draft amendments ready to be passed by the government and then by parliament.
The changes would affect laws on personal income tax, corporate income tax and on tax on profit from disposal of derivatives. This would also require changes to the tax procedure act. The bills are to hit parliamentary benches in the autumn to be fast-tracked in order to kick in on 1 January 2020.
Finance Minister Andrej Bertoncelj would like the package to be revenue neutral. "We've planned a set of soft measures with the main role to be played by the Financial Administration," the minister said in a recent interview with the magazine Reporter.
The revenue service is to produce an extra EUR 160 million through a proactive approach that would make tax collection more effective and crack down on tax evasion and fraud involving social contributions, the minister explained.
Overall, the planned cuts on labour taxation, along with the cuts on holiday allowance that have already been implemented, are projected to reduce receipts by roughly EUR 220 million annually, while additional taxes would increase receipts by an estimated EUR 87 million.
FURS has told the STA it has already drawn up measures designed to collect an additional EUR 160 million more in taxes. These include measures to increase voluntary payment of taxes such as expanding payment methods and advancing tax literacy among the young, and improving inspection procedures.
In this way they hope to collect EUR 50 million more social contributions, EUR 45 million more VAT and EUR 40 million more personal income tax. A further EUR 25 million could be gained from more aware tax payers and better oversight of how legal persons calculate and pay tax and of tax on motor vehicles.
The proposed changes include increasing general tax credit and tweaks to the income tax brackets to reduce the tax burden on the middle class. This is to be offset by higher corporate income tax and higher taxation of capital gains and of rental income.
