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Employers: Raising Taxes Woud Affect Us, State Coffers and People
Thursday 19 November 2009 Zoom in | Print page
Bratislava, November 19 (TASR) - A possible increase in taxes would affect the business environment in Slovakia and, in the end, it could result in reducing the revenues flowing to the state coffers, president of the Slovak Federation of Employers' Associations (AZZZ) Tomas Malatinsky told journalists on Thursday.
He was speaking in reaction to repeatedly-emerging rumours about such a step. The Finance Ministry's Financial Policies Institute (IFP) again pointed to the possibility of raising taxes on Wednesday.
According to Malatinsky, introduction of the tax on dividends and property or raising (graduating) taxes for wealthy people may be a popular step, but the results would be negative for business people as well as for the state. "The rich then behave in a way that they leave the country and go to do business or generate profits in a country where there aren't such criteria," warned the head of the employers' federation.
Malatinsky recalled the tax reforms carried out by the previous government - introducing the flat tax of 19 percent and cancelling the tax on dividends. "In times when we introduced a very advantageous taxation compared to the Czech Republic, Czech companies were coming here on mass scale that year, opening their branches and generating profits. It was one of the best Slovak moves, thanks to which the Slovak budget coffers started to be filled quite noticeably. If measures such as a withholding tax on dividends are introduced, I worry that it will have the opposite effect," he said.
A good way how to start up the economy, which would also help people, would be trying to improve the business environment that is currently impaired by the economic crisis and poor law enforcement, chaotic legislative changes, corruption and clientelism, he claims.
Malatinsky thinks that it is the opinion of the employers that is often overlooked in the current negotiations of the social partners (also known as the Tripartite - representatives of government, trade unions and employers).
"The business environment suffers from this ... businesses will adapt to it. But, then, the Government and people shouldn't be surprised about growing unemployment, higher costs and mounting problems in the society," Malatinsky pointed out.
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