Special tax bill confirmed, safe bet to be passed

30 May 2012

The Slovak government is pushing ahead with proposals for a special tax on regulated companies in utility sectors – telecoms, energy and postal services – with Prime Minister Robert Fico elaborating on details of the scheme on Tuesday, following initial parliamentary support last week. As reported by Reuters, Fico said a special 4.2% tax on annual profit would be applicable in both 2012 and 2013 on top of a rise in corporate tax from 19% to 23% next year. The special tax is aimed at raising around EUR100 million (USD125 million), the PM announced, as part of measures needed to find an extra EUR1.5 billion next year to achieve a target of lowering the budget deficit to 2.9% of GDP, down from 4.8% in 2011. Final approval for the proposals is expected to be a formality as Fico’s Smer party occupies 83 of 150 seats in parliament. Raising taxes in the Slovak telecoms sector would result in gaining extra money from major foreign stakeholders based in Germany (via Deutsche Telekom-controlled Slovak Telekom), France (Orange Slovakia) and Spain (Telefonica O2 Slovakia).