On Wednesday, Slovak President Zuzana Čaputová signed the 2023 state budget. On the same day, she also approved the introduction of a fossil fuel levy, an increase in the tax on hard liquor and a permanent reduction in VAT for catering and sports venues from 20 to 10%.
The tax on alcohol will increase by 30% next year. The levy on gambling will also increase - from the current 22 % to 27 %. Companies that generate at least 75% of their turnover from economic activity in the oil, gas, coal and refinery sectors will pay a solidarity contribution from higher profits.
In line with the law, Slovakia's general government deficit should grow from almost 5% of GDP this year to 6.44% in 2023. Next year's seasonally adjusted deficit will equal 3.1% of GDP, a figure close to the current year's estimate (2.9% of GDP).
State budget incomes are estimated at €26.699 billion, and expenditures at €35.041 billion, with the deficit standing at €8.3 billion. General government incomes should total €50.579 billion next year, while expenditures should reach €58.451 billion. The deficit should amount to €7.9 billion.
Furthemore, Čaputová also signed an amendment to the law on general government budgetary rules, according to which the general government budget will not have to be aligned with public spending limits if the general escape clause under EU rules is activated. "During the activation of the general escape clause, the government won't be obliged to harmonise the general government budget with the public spending limit, even if it is approved by Parliament, but it will be obliged to submit to Parliament documents on the relationship between the approved public spending limit and the general government budget," said the Finance Ministry in an explanatory report.
The government will be obliged to submit such documents even if the general escape clause is activated and the general government budget is submitted to Parliament at a time when the public spending limit has not been approved by Parliament. The government will have to do so within 30 days of the approval of the public spending limit.
If the activation of the general escape clause occurs after the approval of the public spending limits and after the approval of the state budget for the respective financial year, the government will be allowed to exceed the limit. The public spending limit will be part of the general government budget as of the year in which the general escape clause is deactivated at the EU level.
Slovakia has set the approval of spending limits and their incorporation into draft state budgets as one of the milestones of its national recovery plan. However, the government later failed to agree on the use of spending limits in the 2023 budget, and the European Commission therefore threatened Slovakia with a halt to recovery plan payments.
Source: TASR
