By: Vida Kocjan
The tax wedge, which measures the share of taxes and social contributions in the total labour cost, is among the highest in the OECD in Slovenia. In 2024, it amounted to 44.6 percent, significantly above the OECD average of 34.9 percent, placing Slovenia in sixth place. This alone meant that the average Slovenian received about 200 euros less in monthly net salary (2,400 euros annually) compared to the OECD average.
If Golob’s government had not changed the income tax legislation passed by Janša’s government, all employees would receive one extra net salary in 2025. Before that, the increase would have been gradual starting from 2022.
Tax hit extends to pensioners, farmers, and entrepreneurs
From July 1st, 2025, things are set to get worse with the introduction of the long-term care contribution. The tax wedge has risen to 46.6%, pushing Slovenia toward the top of the OECD tax burden rankings.
The long-term care contribution, introduced on July 1st, 2025, is a new mandatory charge that affects employees, employers, pensioners, self-employed individuals, and others with labour income. It is deducted from gross wages or other income. According to OECD data, even the introduction of the mandatory health contribution (OZP) in 2024 increased the tax wedge by 1.44 percentage points for single employees and 1.96 points for families with two children and two working parents. The new long-term care contribution adds another 2 percentage points to the tax wedge for employees (1% paid by the employee and 1% by the employer). This means that, after July 1st, 2025, the tax wedge for a single employee with an average wage will approach or exceed 46.6%, depending on other changes in tax policy. Pensioners also pay this tax (1% of their net pension monthly, about €10 on average), as do the self-employed and farmers (2% of their income, with a minimum of €27 per month).
Growing tax burden
The increasing tax wedge under Prime Minister Robert Golob’s government is causing widespread unease. Criticism is centred on the rising tax burden, which negatively impacts the economy and citizens’ standard of living. One of Golob’s government’s first decisions in November 2022 was to repeal the more favourable income tax brackets from the previous law. Additional contributions were also introduced. The voluntary health insurance was transformed into the mandatory OZP which, since March 2025, is indexed to the growth of the average salary, further increasing the tax load.
High taxes deter investors
High taxes are said to discourage both foreign and domestic investors. Reports indicate that Slovenia’s business climate is deteriorating, with companies seeking subsidies or opportunities abroad to escape the high tax burden. Critics, such as NLB CEO Blaž Brodnjak, have called out problematic statements by Prime Minister Robert Golob, who advised companies to optimise operations by relocating abroad.
Excise taxes keep rising – never enough
In the last two years, Golob’s government has significantly increased excise duties and other charges. Excise on fuel has increased by 40%, meaning the state now takes about 60% of the fuel price. The tax on rental income has also been raised from 15% to 25%, affecting the housing market.
At the same time, we are witnessing non-transparent use of taxpayers’ money. According to information obtained by SDS MP Anton Šturbej, ministries and the Prime Minister’s office spent €1.844 million on representation expenses in 2024. Several more millions were spent on official travel. But this is just one segment of government wastefulness. On the other hand, Slovenia ranks last among EU countries in terms of absorbing EU funds, which paints a picture of mismanagement.
So, the question arises: Is the government working in the interest of the people, or is it raising taxes and levies for its own benefit? Robert Golob had already promised higher taxes before the 2022 election, but voters did not take him seriously. Now, here we are.
Economic impact analysis
High taxes have negative consequences for Slovenia’s competitiveness and standard of living. The government claims the measures are necessary to fund public services, if anyone still believes that.
The reality is that the growing tax burden under Prime Minister Robert Golob’s government in 2025 has both direct and indirect effects on Slovenia’s economy, impacting competitiveness, employment, investment, and the standard of living. High labour taxes reduce the competitiveness of the Slovenian economy by increasing labour costs for employers and lowering employees’ net wages. According to the Chamber of Commerce and Industry of Slovenia (GZS), reducing labour taxation to the OECD average (34.9%) would increase the average monthly net salary by about €200, or €2,400 annually.
Comparison with Croatia, investments
While countries like Croatia have taken steps in recent years to reduce labour costs, Slovenia is introducing additional burdens, widening the gap in economic growth. Over the past five years, Croatia has experienced two-thirds higher economic growth than Slovenia, partly due to lower tax burdens.
We are also witnessing investor deterrence. High taxes and bureaucratic obstacles discourage both domestic and foreign investors. GZS and the Chamber of Craft and Small Business of Slovenia (OZS) warn that rising labour costs, including the new long-term care contribution, further burden companies and reduce their competitiveness. This leads to businesses relocating to countries with more favourable conditions. In Slovenia, high taxation also reduces the attractiveness of employment.
Decline in living standards
The rising tax burden reduces households’ disposable income, which impacts private consumption a key driver of economic growth. According to OECD data, the tax wedge for families with two children and two working parents has increased by 1.96 percentage points, reaching 37.8%, which is above the OECD average of 29.5%.
In addition to labour taxes, excise duties on fuel and the rental income tax have increased, further burdening households and reducing their purchasing power. This leads to lower consumption and slower economic growth.
Deficit and borrowing
The state budget for 2025 anticipates revenues of €15.2 billion and expenditures of €17.1 billion, resulting in a deficit of €1.9 billion. High public spending and new levies, such as the healthcare and long-term care contributions, increase pressure on taxpayers. At the same time, it is questionable why the government continues to borrow roughly the amount of the annual deficit, around €2 billion per year, accumulating €6 billion in additional debt over the past three years. Some borrowing even happens “in advance,” such as the €1 billion loan taken just before Statehood Day.
Economists also warn of long-term consequences, especially the slowing of economic growth. According to the Institute of Macroeconomic Analysis and Development (UMAR), Slovenia’s growth is slowing. High taxes further hinder Slovenia’s export-oriented economy by reducing cost competitiveness.
Slovenian companies, according to Forbes Slovenia, are also facing a decline in export competitiveness due to global factors like geopolitical instability and tighter EU regulations. The increasing tax burden only worsens their ability to adapt to these challenges.
In conclusion
The rising tax burden under Golob’s government negatively impacts the Slovenian economy by increasing labour costs, lowering net wages, and deterring investments. This results in reduced competitiveness, slower economic growth, and a decline in living standards. The governing coalition (Gibanje Svoboda, SD, and Levica) is not addressing systemic problems. Instead, we hear fantasies from Robert Golob about how great we are and how the whole world envies us.
Simič: “These are the consequences of the last election”
Ivan Simič, tax expert and former director of the Financial Administration of Slovenia: “The result of the last election: higher taxes, higher social contributions, higher RTV license fee, a €100 million loss from restructuring voluntary health insurance, compensation to insurance companies, €1 billion for the military, 20,000 invisible apartments, redirecting entrepreneurs to Croatia and Bosnia and Herzegovina…”
Perne: “This is not a government working for the people”
Boštjan Perne, national security expert: “The motto of our government is: A day without a new tax is a day wasted. This government works for the energy lobby, the left-wing elite, and NGOs. Ordinary citizens are to be squeezed to the last drop. This is not a government that works for the people.”
They plan to collect up to €725 million annually “in advance”
MP Karmen Furman stated: “According to Ministry of Solidarity-based projections, the long-term care contribution is expected to collect: 255 million in 2025, €643 million in 2026, €690 million in 2027, €725 million in 2028. Meanwhile, the actual spending for long-term care remains uncertain. According to media reports based on ministry projections, only €180 million of the €255 million collected in 2025 will be spent, about 70% of revenue. The rest will be carried over into the next year, essentially stockpiling funds. By 2026, revenue and expenses are expected to roughly balance based on the estimated number of beneficiaries. The carried-over funds should ensure the fund’s sustainability until at least 2028.” Minister Simon Maljevac confirmed that money would be collected in advance, acknowledged that the long-term care system is not yet properly set up, and added that any surplus funds will be carried over to the next fiscal year. He claimed the money would not disappear or be redirected to other purposes. However, anyone familiar with this government’s actions may doubt that assurance – see the reallocation of funds even from reserve budgets, such as the purchase of the building on Litijska Street.
