SNS tax cuts would dig a hole into the state budget
The proposal of the SNS party to cut the corporate income tax from 21% to 15% and VAT on food and print media from 20% to 10% would reduce the tax intake by €1.4bn annually, estimates the independent fiscal responsibility council RRZ. The 2020 state budget already includes risks to the tune of €700m and if parliament approves the tax cuts, a public finance deficit of 1.9% of GDP at the peak of the economic cycle could ensue (the current plan is 0.1% surplus). RRZ therefore recommends adopting measures to compensate for the revenue outage.
RRZ pulled from thin air the number that corporate income tax rate cut will reduce tax intake, says SNS leader Andrej Danko. He says the tax cut will pay for itself. Together with the Finance Ministry, RRZ has the best analytical capabilities in Slovakia, while SNS’s understanding of economy is next to none.
The opposition party SaS as well as businesspeople back the proposed tax cuts.
