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Slovenia to raise corporate tax, cut income tax from 2017
May 24, 2016 / 12:41 PM / a year ago

Slovenia to raise corporate tax, cut income tax from 2017

LJUBLJANA, May 24 (Reuters) - Slovenia plans to raise corporate tax by two percentage points to 19 percent and reduce personal income tax rates at the start of 2017, the finance ministry said in a statement on Tuesday.

The ministry has said the higher tax on corporate profits should not hurt Slovenia’s competitiveness because the current rate is among the lowest in the euro zone.

But the country’s personal income tax rates, which rise to around 50 percent at the highest bracket, are relatively high and pressure has been growing to reduce them.

Legislation for the tax changes will be prepared in June and should be passed by parliament in autumn, the statement said.

The Chamber of Commerce and Industry said last week the government should curb public spending rather than hike taxes.

“The public sector should be rationalised. It is essential to curb public spending,” the chamber said in a statement, adding slower growth of exports - the main driver of the Slovenian economy - could hurt growth.

Slovenia, which narrowly avoided an international bailout for its banks in 2013, expects the economy to expand by 1.7 percent this year versus 2.9 percent in 2015. Export growth is seen at 3.7 percent this year, down from 5.2 percent in 2015. (Reporting by Marja Novak; Editing by Tom Heneghan)

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