Through measures, the government has assisted people by ensuring lower prices where possible. For example, by lowering excise duties, it was able to ensure lower fuel prices. Later, due to the liberalization of fuel prices, prices even lowered. This year, due to the lower prices of petroleum products, we witnessed a negative inflation – deflation. In order to improve financial position of the population, a law is also being drafted that will reduce speeding penalties, which are disproportionately high compared to the Slovenian average salary. In addition, kindergarten fees for second children will be waived, which will result in financial relief of young families. “I welcome any reduction in taxes if we do not pass the burden on to future generations with the growth of public debt and if lower taxes are followed by the rationalization of the public sector,” says economist Anže Burger. The state must fill the state treasury in order to avoid increases in public debt caused by the measures. The government will be able to fill the state treasury with an amended tax on motor vehicles, which will with a new regulation enable registration of luxury vehicles and ensure an inflow of new funds into the state treasury.
During the epidemic the government reduced excise duty on liquid fuels. Later, it also deregulated the fuel price market, leading to a further drop in fuel prices. The price of fuel was as much as 17 percent lower than in September. The cheapest petrol and oil can currently be refilled at Hofer’s petrol stations, which experts had anticipated. At Hofer’s pump, the price per liter of fuel is currently 0.929 euros, the price of oil 0.969 euros. The prices of both fuels are on average 3 cents more expensive at Petrol and OMV. This completely rejects the hypothesis that a deregulation of fuel prices would result in more expensive fuel. You can find the current prices of the cheapest fuel via the Gorenjc application.
Cars will become cheaper, there will be more inflows into the budget
According to the current motor vehicle tax, car taxation is somewhere between 0.5 and 28 percent, but under the new proposal, the calculation will be different – tax will no longer depend on the value of the car, instead, it will be based on fixed amounts. Thus, for fuel-efficient vehicles with emissions of less than one hundred grams of carbon dioxide per kilometer, the mark-up on petrol cars will be only 20 euros, and on diesel cars 25 euros. In the category where we find the most cars, the mark-up on the purchase price of the car will be 48 euros or in the case of diesel cars, 57 euros. Luxury cars will become cheaper, and there will be virtually no reason to register a car abroad. For used cars, the tax will be reduced by about nine percent each year, which means that a one-year-old car will have to pay 91 percent DMV, and a six-year-old car will have to pay more than half the tax.
The new law does not anticipate complete abolition of taxation of electric vehicles, but the level of taxation will be low and tied only to engine power. According to the new law, exceptions still remain, families with at least three children will be tax-exempt as well as will be vehicles used to transport disabled people and diplomatic vehicles. We asked tax expert ddr Rok Snežič for an opinion on the reduction of the motor vehicle tax. “From now on, people will buy cars with Slovenian license plates and no longer with German or Slovak ones, as has been the practice so far. This means that the state budget will receive more money as these owners will prefer to register their cars in Slovenia,” said Snežič. For example, now, the owners will pay 40 thousand euros VAT for a vehicle worth 200 thousand euros as well as the tax on motor vehicles. If this vehicle were registered, for example, in Germany, the state would not receive anything from it.
A bill reducing speeding penalties to be introduced in Parliament
On the initiative of the Ministry of Infrastructure, a bill reducing speeding penalties is to be introduced in Parliament. Most penalties would be lowered between 20 and 500 euros, while the already prescribed penalties for the most serious violations would remain at 1,000 or 1,200 euros. In the past, there was talks about a similar proposal as speeding penalties are completely disproportionate compared to the Slovenian average wages, however, previous governments did not do anything about it.
“I welcome any reduction in taxes if we do not pass the burden on to future generations with the growth of public debt and if lower taxes are followed by the rationalization of the public sector,” says economist Anže Burger. On the one hand, the government has reduced fuel prices through excise duties, and the state revenue deficit could be indirectly covered by the surplus of revenues from the lower motor vehicle tax we mentioned.“ In connection with various tax cuts, I would personally rather direct the loss of state revenues towards relieving the salaries of the most productive employees. High marginal tax rates are currently one of the biggest inhibitors of Slovenia’s international competitiveness,” he added. In September, the government’s strategic council for debureaucratization presented measures, including the introduction of a social cap to reduce the taxation of higher value-added employees’ salaries, which would make Slovenia more competitive in development of more productive staff.
Free kindergarten for the second, third, fourth, etc. child within the same family
The government has approved an amendment to the law that reintroduces free kindergarten for the second child. In addition to the free kindergarten for the second child, which is included in the kindergarten at the same time as the older child, the proposal also introduces free kindergarten for the third and subsequent children from the same family, even if the children are not in the kindergarten at the same time. The mentioned amendment will thus relieve the financial burden of young families. “In the long run, the most effective measure is to reduce kindergarten payments for families with more children, which is likely to increase fertility over time and thus reduce the cost of the aging population,” Burger points out. The measure has proven effective in the past, as in the years of free kindergarten, the birth rate has risen, which we have already written about.