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HNonline.sk 28. 3. 2008 10:03
“Mečiar’s tax” so far not
Autor(i): Kevin Slavin
ĽS-HZDS wants to fight increasing grocery costs by reducing the value-added tax. It has proposed to its coalition partners that from January, 2009, therefore together with the adoption of the common European currency, VAT on selected items would drop from the present 19 to six percent. If this measure were to be adopted, Slovakia would have three rates for the tax; 19-, 10- and 6-percent.
The decrease “we consider in all seriousness one of the few tools for price stabilization, even though it is no salvation“, commented MP Miroslav Jureňa (ĽS-HZDS vice-chair and former Minister of Agriculture). So far the effect this would have on the state budget is not clear. It is estimated that the shortfall could amount to from three to ten billion crowns annually. Party leaders also did not clarify which groceries would be covered by the tax reduction. Economists however have lined up in opposition to the scheme. They believe that the lower rates would not lead to cheaper food. “The influence of prices for main agricultural commodities on world markets has a greater effect on the stabilization of prices,“ advises the UniCredit Bank analyst Ľubomír Koršňák. Their increase of from 50 to 100 percent together with certain other influences, such as the rise of consumption of foodstuffs in Asia and the production of bio-fuels, caused the more than eight percent increase of grocery prices in Slovakia. This showed the greatest increase among all the goods and services monitored by the Statistics Office SR. (March 25)
State opens the Transpetrol affair
In the dispute over shares in the Transpetrol company, the Slovak oil transporter, Slovakia could move from being the majority to a minority owner as a result of a court judgment. The eastern Slovakia entrepreneur Ignác Ilčišin is demanding a 34-percent share package through the court suit. The Ministry of the Economy has already begun preparing legal steps to overcome a Constitutional Court decision in favour of Ilčišina. It is not excluding state intervention. “Clearly an intervention by the Minister of Justice will be necessary,” predicted Economics spokesman Branislav Zvara. According to him a review of the judgment should be prepared in the coming weeks. If the ministry is unsuccessful, and Ilčišin retains the 34 percent package, the state would be left with only 17 percent. The remaining 49 percent of the shares is owned by the Russian Jukos corporation.
A group of people around the businessman and his Tradeunion firm gained the disputed share package in 1998 through execution. Its reason according to Ilčišin was the unjustified conduct of the tax office in Vranov nad Topľou, resulting in a 43 million crown claim against him. The state institutions doubt the legal validity of the execution, but last December the Constitutional Court decided the execution was in line with the law. As a result of it Tradeunion took over the Transpetrol shares in1998, and the government’s attempts to have the execution proceedings overturned have so far been unsuccessful. However the Court did not go so far as to affirm that Tradeunion is a shareholder in the state enterprise. (March 25)
Anti-chain law to come later
The law on inappropriate conditions in business chains, by which the government wishes to restrict the power of business conglomerates should not come into effect from June of this year, but from 2009. This was the result of yesterday’s meeting of the Economics Committee in parliament. Business owners feared that they would not have time to adjust to their new obligations, and so committee members, with the approval of the Ministry of the Economy, eased their anxiety.
Although the business community does not agree with the proposed act, they are grateful that parliament delayed its effectiveness to January, 2009. “What it will cause is still on the level of speculation and hypothesis,“ commented Vice-chair of COOP Jednoty Martin Katriak. “I have to admit that in the second half of the year businesses will have to provide dual marking of prices, in crowns and euros, which will definitely burden them. Accordingly we have agreed to the change in the deadline, which is logical,” Economics Minister Jahnátek explained. Businesses are not ruling out that if the law restricts them to too great an extent, they will elaborate contracts with their suppliers not under Slovak law, but the law of another EU member state. Products of some Slovak producers could thus stop being sold here. (March 19)
English translation by Kevin Slavin
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