Text file: 9974.txt
author: lipi
downvotes: 2
end consideration date: 2019-04-22
id: '9974'
number comments: 4
number views: 482
proposal type: Competent authority response
response: 'Response from the Ministry of Finance


  With regard to the reduction of VAT rates, we would like to point out that both
  the Government and the National Assembly in its current composition have already
  decided on and rejected a similar legislative proposal, namely in the last quarter
  of 2018, when a group of Members of the National Assembly, with Mr Danijel Krivec
  as the first signatory, tabled a proposal to reduce VAT rates to the pre-crisis
  level. It is necessary to be aware of the significant reduction in state budget
  revenues that such a measure would entail, together with the additional imbalances
  and destabilisation of public finances that (could) occur.


  The implementation of the VAT amendments proposed by the initiator would roughly
  imply a reduction in State budget revenue of between EUR 700 and 800 million; the
  implementation of the other three proposals (reduction of the insurance transaction
  tax, abolition of the lottery ticket tax and the tax on financial services) would
  further reduce State budget revenue by around EUR 130 million. It should be stressed
  that such a financial shortfall would mean such a large increase in the budget deficit
  that it would significantly increase the credit risk, both for the State and for
  Slovenian companies, which could lead to serious macroeconomic imbalances. Without
  simultaneously compensating such a shortfall with measures on the revenue or expenditure
  side of the budget, such measures cannot be contemplated.


  We need to be aware that the primary objective of fiscal policy remains to reduce
  debt and ensure the achievement of the medium-term objective (MTO) in the period
  2020-2022. This is the basic guiding principle for economic policymaking, which
  includes fiscal policy. In recent years, the country has managed to emerge from
  the Excessive Deficit Procedure (EDP) with nominally balanced public finances and,
  at the same time, to correct macroeconomic imbalances, and we believe it is important
  to approach any further changes to these policies with a high degree of caution.
  Otherwise, we cannot guarantee an adequate level of economic growth and productivity
  gains.


  The present initiative cannot therefore be supported.'
response date: 2019-05-07
response due date: null
sent date: 2019-03-27
title: Reducing VAT and similar tax rates to their previous levels
upvotes: 16
url: https://predlagam.vladi.si/predlog/9974
