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Monday, December 5, 2022

Artisans and entrepreneurs against the government’s intentions on mandatory “stamping” and tax increases

By: Sara Kovač/ Nova24TV.si

The Chamber of Commerce and Industry of Slovenia (OZS) opposes the proposed changes – including mandatory “stamping” and tax increases: “The change brings additional administration for companies, it is not in tune with times and new forms of work, it introduces mistrust between employers and workers, and especially, it does not solve the problem that should be addressed with the change,” they emphasised, among other things. OZS also believes that raising taxes is not the right measure to retain the best personnel in Slovenia – on the contrary. “Representative employer organisations expect a comprehensive tax reform; therefore, we propose withdrawing the bill on amendments and additions to the Income Tax Act,” they wrote in a press release.

It is known that the Slovenian worker is one of the most taxed in the world, as the OECD has repeatedly noted – and Prime Minister Robert Golob declared that he does not need lower taxes, otherwise he would be wasting his 35,000 euros (gross and excluding bonuses) on nonsense. Slovenians are therefore more taxed than Germans, and while Olaf Scholz’s German government will raise the limits of tax brackets next year to reduce the impact of the costliness, Golob’s government plans to abolish the indexation of income tax brackets, Delo reported these days, which also cited a comparison: with a gross salary of 2,000 euros, a worker in Slovenia receives 1,323 euros net, while in Germany the salary in the same case amounts to 1,436 euros. With a gross salary of 2,000 euros, an individual in Slovenia pays 2,815 euros in income tax to the state per year, while a German only pays 1,869 euros.

Among employers, the changes to the law on records in the field of work are also causing quite a stir, and according to the daily, trade unions support the proposal of mandatory “stamping”. The Labour Inspectorate, which has been working for these changes for several years, also welcomes the amendment, as recording is key to monitoring the provisions on working hours and breaks and rest, they wrote in Dnevnik, where they also stated that currently the most recorded violations regarding working hours and breaks are in the field of catering and tourism, trade, and construction. But while “stamping” may be welcome in some industries, it cannot be generalised to everyone. The Chamber of Commerce and Industry of Slovenia (OZS) opposes the proposed changes: “When recording working hours, the change brings additional administration for companies, it is not in tune with times and new forms of work, it introduces mistrust between employers and workers, and especially, it does not solve the problem that should be addressed with the change,” they emphasised.

When asked what the attack by the Ministry of Labour means for artisans and entrepreneurs – i.e., mandatory “stamping”, the OZS also emphasised that mandatory “stamping” involves introducing a technical solution that is not yet known and developed, so such a proposal to the law must definitely not be passed. The same applies to tax policy and indicated changes. “These make companies less competitive, and at the same time, they nullify the many years of efforts of artisans and entrepreneurs, so that the employees would have more net (more in their pocket) with the same gross. The greater net was the efforts of both employees and employers,” they pointed out when asked about the increase in taxes.

How will companies adapt to the law that is being prepared, i.e., that the recording of working hours will be mandatory?

The recording of working hours is already mandatory, but at OZS they are opposed to changes (exclusively electronic management), as they believe that this type of management does not bring the solutions that the changes are supposed to achieve. “Also, the proponents do not take into account situations in practice – different ways of working (in the field), new forms – work at home, etc. and put employers in a position where solutions should be used that the employer cannot control,” they pointed out in the OZS and explained that there are unnecessarily more opportunities for abuse than is currently possible, and with it mistrust, which is only bad for any company. Such arrangements are not known in any EU country, they emphasised.

The current situation suggests that the crisis will hit the entire economy and population

At OZS, they also do not believe that raising taxes is the right measure to retain the best personnel in Slovenia – rather the opposite. When asked how entrepreneurs are otherwise preparing for the coming crisis, the OZS explained that companies have weathered the corona crisis relatively well and are in solid condition (with the exception, of course, of industries that were significantly affected). “However, the current situation indicates that the crisis will hit the entire economy and population, so companies are investing significantly more cautiously,” they pointed out, and warned that companies did not or do not have time for special preparations for the crisis, because immediately after the corona crisis, a new emergency situation began. At the moment, more or less all companies are struggling with mitigating the damage caused by abnormal energy price increases and organising during the energy crisis. According to them, most of the preparations are in this area. When will the mentality that only entrepreneurship creates added value mature in Slovenian politics? “We hope as soon as possible,” they replied in OZS.

Representative employers’ organisations propose the withdrawal of the bill on amendments and additions to the Income Tax Act

“Representative employers’ organisations, the Chamber of Commerce of Slovenia, the Chamber of Commerce and Industry of Slovenia, the Chamber of Craft and Small Business of Slovenia, the Association of Employers of Slovenia, and the Association of Employers of Trades and Entrepreneurs of Slovenia are completely opposed to the partial changes brought by the bill on amendments and additions to the Income Tax Act, based on which positive effects of the latest amendments to the Income Tax Act, which were adopted in March 2022, should be nullified even before their final implementation,” they wrote in a press statement today, stressing that they expect a comprehensive tax reform and propose withdrawing the draft law from public consideration.

On August 1st, 2022, the Ministry of Finance submitted for public consideration the bill on amendments and additions to the Income Tax Act – EVA: 2022-1611-0093 (hereinafter: the bill). “Representative employer organisations completely oppose the partial changes brought about by the bill and on the basis of which the positive effects of the latest amendments to the Income Tax Act, which were adopted in March 2022, should be nullified even before their final implementation,” they emphasised, and especially pointed out that before the start of the public hearing, the draft law was not considered within the framework of the Economic and Social Council, which is contrary to the applicable rules on its operation. The Ministry of Finance has already announced a comprehensive tax reform, within which, based on an integrated analysis, it could also propose changes to the income tax legislation, namely in the direction of ensuring greater net incomes for Slovenian citizens, rather than proposing partial changes that will further reduce their net incomes. “Given all of the above, we propose that the Ministry of Finance withdraw the bill on amendments and additions to the Income Tax Act from public consideration,” they added.

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