The government of Robert Golob has drafted new tax legislation that will mean lower wages for all of us. Yes, you read that right. Even for those with the lowest incomes, who are receiving minimum wages. And with average and higher wages, the differences will be even bigger.
The National Assembly will soon decide on the next changes to tax legislation. Under the income tax law adopted by the Janša government, which is still in force today, the general tax credit would increase from 4.5 thousand euros to 5.5 thousand euros next year, while the income tax scale and other allowances would be adjusted in line with the increase in consumer prices. If inflation were 10 percent, this would mean that the tax brackets would also be raised by 10 percent. This would put the taxpayer in a higher tax bracket later and leave a little more money in his pocket. Now, however, the government of Robert Golob is proposing to increase the general tax credit to 5,000 euros, to change the formula for the additional general credit to which those who receive the lowest income are entitled, and to raise the income limit up to which the additional general tax credit can even be claimed. “But be warned – under the current law, the limit would increase in line with inflation anyway, as confirmed by the Ministry of Finance. If the limit were not increased and the minimum wage (which is also adjusted for inflation) were not increased, virtually no one would be eligible for this additional tax credit,” the newspaper Finance wrote.
The 50-percent income tax bracket will also return. The new income tax scale will also no longer automatically adjust to increases in the cost of living. From now on, this will be decided each year by the government and then by the National Assembly. The calculations below are based on the government’s announcement that there will be no adjustments for inflation next year.
Electoral decisions come at a cost. But how high is that cost, exactly?
The newspaper Finance, in cooperation with the accounting firm LeitnerLeitner, has calculated exactly how much the decision taken by some on the 27th of April of this year will cost us. Here are all the figures.
| How much lower will the net monthly salary be in 2023 after the proposed changes | |||
| Gross salary | Net salary under current law (in EUR) | Net salary under proposed law (in EUR) | Difference (in EUR) |
| Minimum wage taking into account 10 % inflation (1,181.87 EUR) | 861.80 | 853.67 | -8.13 |
| Average salary (2,000 EUR) | 1,352.34 | 1,334.21 | -18.13 |
| Twice the average salary (4,000 EUR) | 2,484.45 | 2,448.39 | -36.07 |
| Six times the average salary (12,000 EUR) | 6,284.26 | 6,042.80 | -241.46 |
Note: The calculations take into account 10 percent inflation in the income tax scale, the additional general tax credits and the basic general tax credit of 5.5 thousand euros. The resulting figures are compared with those resulting from the new calculations under the legislation proposed by the Robert Golob government (meaning, taking into account the basic general tax credit of 5,000 euros, the new formula for calculating the additional tax credits, the income tax scale not aligned with inflation – as announced by the Ministry of Finance).
How much lower will the net yearly salary be in 2023 after the proposed changes
| Gross salary | Net salary under current law (in EUR) | Net salary under proposed law (in EUR) | Difference (in EUR) |
| Minimum wage taking into account 10 % inflation (14,182.48) | 10,341.65 | 10,244.05 | -97.6 |
| Average salary (24,000 EUR) | 16,228.09 | 16,010.54 | -217.55 |
| Twice the average salary (48,000 EUR) | 29,813.44 | 29,380.64 | -432.80 |
| Six times the average salary (144,000 EUR) | 75,411.16 | 72,513.60 | -2,897.56 |
Janša’s law was more favourable for those who have the lowest incomes
According to the calculations, the Golob government’s tax reform would be slightly more favourable for those with the lowest incomes, but since the government no longer intends to align the income tax scale with the increase in the cost of living, it will actually be less favourable for those who receive minimum wage. So, with inflation at 10 percent and the resulting adjustment of the minimum wage and the tax credit, as envisaged in the Janša law, those who receive minimum wage would actually get 8 euros net more per month, or 862 euros net in total. Under the Golob government’s proposal, they would get 854 euros net.
Golob’s attack on the middle class
According to the above calculations, employees who receive the average salary would get 18 euros a month more under the Janša legislation than they will get under the Golob government. Those who bring home twice the average monthly salary each month would gain 36 euros per month and 433 euros per year.
Driving out the most productive employees
And the situation is the worst in terms of the highest wages. Someone with a gross monthly salary of 12,000 euros (six times the average salary) would get a monthly salary of 6,284 euros under the current, Janša legislation, while under the proposed Golob government’s amendments, they would only get 6,043 euros net. The difference is 241 euros per month and 2,897 euros per year.
Andrej Žitnik
