The Chamber of Craft and Small Business of Slovenia (OZS) has expressed some concerns about the planned tax changes that have recently been announced by the Golob government. Slovenian craftspeople and entrepreneurs are already feeling the effects of the cooling of the German economy, which is reflected in a decline in orders, and the government’s measures will only make matters worse, they added. They also warned that the new tax burden would only further worsen the economic situation in the country. Moreover, they described the tax relief for foreign nationals only as pure discrimination, as they would have expected a similar relief for Slovenian employees, too.
Blaž Cvar, President of the Chamber of Craft and Small Business of Slovenia, stressed that the German economy, in particular the automotive industry, is crucial for Slovenian craftspeople and entrepreneurs. The current cooling of this economy is already causing a decline in orders in Slovenia, which could lead to a more serious economic crisis if the government of Robert Golob does not act in time.
“In the meantime, we need to adopt the right measures to mitigate the fall in economic activity, and not put further administrative and financial burdens on the economy,” warned Mr Cvar.
Golob’s policies do not support the economy
Peter Pišek, President of the Transport Section of the Chamber of Craft and Small Business of Slovenia, stressed the importance of the economy, which fills the state budget and supports the welfare state. In his opinion, the current policies do not support the economy, as de-bureaucratisation and tax relief are urgently needed. Bogdan Oblak, President of the Logatec Regional Chamber of Craft and Small Business, added that a stable and favourable tax environment is key to mitigating the economic slowdown, and he was also critical of the retroactive changes for sole entrepreneurs with normalised expenses, as such changes create an unpredictable business environment. “Imagine that the changes will apply for time that has already passed, meaning retroactively. This shows that we have a really unpredictable business environment in Slovenia. Here, we have to say a firm no to these changes.”
This is pure discrimination – tax breaks only for foreign nationals
Among the tax changes in the legislative package is also a proposal for the government to introduce tax breaks for foreign nationals under the age of 40, which Oblak described as discrimination against Slovenian citizens. Additionally, Executive Director of the Chamber of Craft and Small Business, Danijel Lamperger, calculated that the changes would result in about 13 percent of sole entrepreneurs with normalised expenses being dropped from the system in question. In his opinion, the state and employers have diverging ideas about the effects of these changes, which he considers detrimental to Slovenian entrepreneurship. “We employers have been very vocal about the tax changes. The state, on the other hand, believes that this package is aimed at improving the situation of entrepreneurship, which shows that we have very different opinions on the matter,” noted Lamperger, who was also critical of selective incentives intended only for foreign nationals.
Slovenia’s fall on the Index of Economic Freedom
The Chamber of Craft and Small Business of Slovenia called on the government to raise the threshold for sole entrepreneurs with normalised expenses for entry into the VAT system to 85,000 euros, and to maintain the system for sole entrepreneurs with normalised expenses in its current form, as it is changed too frequently, which threatens the legal certainty of the taxpayers. In a discussion on the matter, Marko Lotrič, the President of the National Council of the Republic of Slovenia, pointed to Slovenia’s drop in the Index of Economic Freedom, which is mainly linked to the high wage burden, which discourages Slovenian talent from staying in our country and leads companies to relocate abroad. “From afar, foreign analysts estimate that this freedom is declining. The biggest problem is the wage burden, especially for highly skilled jobs, where wages are even more burdened. Slovenian talent is thus also being discouraged from staying here, which I think is the wrong way to go. I do not know what the Constitutional Court would say about this, because it is inequality before the law. Businesses are already moving abroad, and as a result, we are getting less revenue for the state coffers.”
The government has not been able to carry out one serious reform so far
Lotrič was also quite critical of the government, saying that it is not pro-business and that it has not been able to implement a single serious reform to date. He also believes that the reason for the cooling of the economy in our country is not only the cooling of the German economy, but also a misguided economic policy.
Government policy decisions are destabilising the Slovenian economy
Zoran Simčič, Vice-President of the Chamber of Craft and Small Business, also criticised the announced tax changes, stressing that Slovenia needs a comprehensive tax reform. Member of the National Council Aleš Pulko also shared his opinion on the matter, adding that the consequences of the current measures will only become apparent in a few years’ time. In addition, Pulko pointed out that these political decisions are destabilising the Slovenian economy, with not only the German economy cooling down, but also other markets where Slovenian companies operate.
A. G.
