Slovak News Back to the news
ADDS: Interventions into Third Pillar Won't Help State Budget
Thursday 30 September 2010 Zoom in | Print page
Bratislava, September 30 (TASR) - The Government's proposed amendment to the Social Insurance Act will not have a positive effect on the state budget, said representatives of the Association of the Supplementary Pension-fund Management Companies (ADDS) on Thursday.
According to the proposal, the contributions sent by employees and employers to the supplementary pension-fund management companies (so-called third pillar of the pension system) would be taxable. ADDS President Milos Krssak pointed out, however, that this won't bring as much money to the state coffers as the Government expects. He stressed that if this measure is introduced, it will harm 750,000 savers in the third pillar.
ADDS wants to initiate an expert discussion on the matter. "There is a declared Government intention to reduce the deficit of the state budget also by cancelling exemptions (from tax). By cancelling these exemptions within the third pillar – which will significantly demotivate the savers – the positive fiscal influence won't take place for one simple reason: employers will stop contributing to their employees' retirement via the third pillar, because their expenses for such an activity will grow by almost 30 percent compared to the current situation," claims Krssak.
In addition, ADDS points out that all the motivation for the savers will disappear as well when the amendment is approved, as they'll lose the tax relief and will still have to pay 9-percent levies to Socialna Poistovna.
"When we look at an ordinary saver-employee, whose average monthly contribution is €14 ... he or she is to lose the tax relief that, in this case, represents €2.66. Also from the average contribution of the employer, which is €21, the employee is due to pay 9 percent to Socialna Poistovna, which is €1.85. Furthermore, the employer also has to pay a levy of 25.4 percent from the €21, which is €5.33. For all concerned this will be totally demotivating and the third pillar in its current form will practically cease to exist," specified ADDS vice-president Viktor Kouril.
All rights reserved. Any publishing or further dissemination of press releases and photographs from TASR's resources without TASR's prior written approval constitutes a violation of the Copyrights Act.
