By: Nova24tv.si
The Ministry of Finance is preparing a measure that will provide tax relief for Slovenians with the highest incomes. There are reportedly only around 60 such individuals in the entire country. The tax relief, which is expected to be implemented in two phases, is mentioned as a counterbalance to the property tax.
Slovenia is one of the most tax-burdened countries among OECD member states, particularly evident in the taxation of labour. According to OECD methodology, also used by Slovenia’s Ministry of Finance, the tax wedge for an individual without children earning an average salary is 43.3% in Slovenia, compared to the OECD average of 34.9%. For a single individual without children earning 2.5 times the average salary, the tax wedge in Slovenia rises to 49.5%, while the OECD average is 41.8%.
The Ministry of Finance recognises that tax disparities increase with higher income levels, making labour tax relief a priority. This relief would likely be implemented in two phases. According to reports by Forbes, these measures could reduce budget revenues by approximately €600 million, a sum the government hopes to offset through property tax revenues.
The government of Robert Golob has so far implemented measures that have increased the tax burden on the population.
The first phase would involve introducing a special allowance for income from employment, such as a €2,000 annual reduction in the taxable base. According to estimates, this allowance would reduce budget revenues by €400 million. Workers earning the minimum wage would save €320 annually, while those earning the average wage would save €520 annually.
The second phase would include three additional measures, namely adjusting the income tax brackets, reducing the income tax rate in the highest tax bracket (e.g., from 50% to 43%), and introducing an additional tax bracket with a lower tax rate (e.g., a 20% rate for taxable bases exceeding €500,000). This new bracket would apply to some of the highest-paid managers in the country. “Given the fluctuations, we can still expect about 60 taxpayers in the coming years whose income, subject to annual income tax assessment, would exceed this threshold,” the Ministry of Finance stated.