The Cabinet of Robert Fico has approved the draft general government budget for the years of 2014 to 2016. The material will now go to Parliament to be discussed at its last scheduled meeting for this year. According to legal deadlines, the Cabinet must present a draft budget for next year to Parliament by October 15.
According to the proposal for next year which the Cabinet approved, the general government in Slovakia, which includes government agencies, municipalities, and other public entities, can produce a deficit equal to 2.83 percent of gross domestic product. The deficit would be slightly lower than projected in the original budget proposal from mid-August that planned next year’s deficit at 2.9 percent of GDP. In subsequent years, the approved draft foresees a gradual reduction of the deficit to 2.57 percent of GDP in 2015 and 1.5 percent a year later. This year, the Finance Ministry expects a general government deficit of 2.98 percent of GDP. The Finance Ministry integrated into the current wording of the draft budget measures on both the revenue and the expenditure side. A reduction of expenses by €105 million should be achieved by realisation of the second stage of ESO public administration reform that increases efficiency in the public sector.
“At the same time, under ESO, an analysis was performed of government real estate and in 2014 revenue from the sale of unneeded assets is expected at €54 million,” writes the general government budget draft for 2014 to 2016. In addition, next year’s draft budget also envisages more efficient performance of enterprises with state capital participation. This, according to the Finance Ministry, should generate increased revenue from dividends from these companies by some €91 million. Overall, together with other measures to streamline the general government, the budget in 2014 should get additional €333 million. The Finance Ministry has also prepared new measures on the revenue side. On the one hand, it proposes to reduce the corporate income tax rate from 23 percent to 22 percent, but the other hand it wants to introduce a system of a license for commercial companies. Licenses should be paid by companies which earn little or even no profit.
