Coalition MPs pass tax-laden consolidation package, impacting every wallet

Companies in Slovakia will pay the highest tax in central Europe.

By: sme.sk

Oct 03 2024
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Coalition MPs pass tax-laden c

Parliament has approved the consolidation package of Finance Minister Ladislav Kamenický from the ruling Smer party.

The package was supported by 79 MPs, meaning all coalition members voted in favour, despite the fact that coalition parties bickered over certain measures until the last moment. The opposition submitted a total of 23 amendments, none of which were passed.

The package contains 17 measures, which, according to the ministry, are expected to save the state €2.7 billion. In recent days, the government made several significant changes to the original proposal through the MPs’ amendments in a fast-tracked legislative process. For this reason, the Council for Budget Responsibility noted in its latest commentary that the final value of the package will be smaller.

Thanks to these measures, the public finance deficit is expected to decrease to 4.7 per cent next year from just under 6 percent of GDP this year.

The vote on the consolidation package on October 3, 2024. (Source: TASR - Martin Baumann)

Higher VAT, but not on food and books

The value-added tax (VAT) will change from next year, with three rates introduced. The standard rate will rise from the current 20 percent to 23 percent, applying to most goods.

VAT on most food products will drop from 20 percent to 19 percent.

On Wednesday, the government approved a proposal to set up a website to monitor the prices of selected food items. So far, they plan to track 20 items, which already fall under the lower 5 percent VAT rate. This rate will apply to so-called basic foods, previously taxed at 10 percent.

The 5 percent VAT rate will also cover medicines, medical aids, and textbooks. After significant criticism of the minister, books, audiobooks, e-books, printed media, and magazines are included in this lower rate.