The poorer paid for the weakening of the left

The beginning of 2015 was written and the left-wing Smer was at the top. He ruled alone and launched a major reform that reduced levies on more than 600,000 least-earning Slovaks. The minimum wage was then 380 euros and after the reform it increased by 19 euros net.

However, the levy item is getting weaker in the current direction the right-left government failed to sustain and with this year’s growth minimum wage to 580 euros gross, the levy ended forever advantage of the weakest earners. The team is growing at a minimum net incomes are rising, but not as they could as they pay more and more on levies.

“This year, I switched from a permanent employment relationship to a trade. It’s great, as my monthly salary has increased by about 102 euros, “ Emil Gombálek speaks for Pravda. The second year he helps with wood processing in Lučenec. His colleagues working for a minimum wage of 580 euros gross they have a net income of less than 477 euros. “I am a self-employed person services I invoice 650 euros. From this I will pay the minimum health contributions in amount of 70.91 euros and I will have 579.09 euros left, “praises Gombálek.

The high tax burden on people working at a minimum the salary is also drawn to the Council on Budgetary Responsibility. “For example, if the tax burden of the minimum wage in 2020 was the same as in 2015, in net terms, employees would receive 40 euros more per month, “ said the Executive Director of the Council’s Office for Budget Responsibility Viktor Novysedlák.

Bad tax mix

Just five years ago, it started operating in the economy a deductible contribution that reduced health contributions; and increased the net direct income of people with a monthly salary of up to 570 euros. Less on employers also paid contributions. However, the levy item will be in the next years did not valorise and its impact decreased. “The growth of the minimum wage, which increases the tax burden on employees and employers, it may not be the most optimal solution after taking into account all the effects. On the other hand, any reduction in taxes and levies has a negative impact on public budget and without taking additional measures on the expenditure side or budget revenues would widen the general government deficit, “ added Novysedlák. The public social and health care works from the levies system.

Domestic companies have been complaining about high taxes and levies for many years. “Issue is that in our country there is too much work tax and little ecological burden and annuities arising from the ownership of property, “said the association’s analyst Working poverty Milan Kuruc. If all tax revenues are calculated and levies in relation to gross domestic product (GDP), Slovakia is among the 9 least taxed countries in the European Union. “Even American neoliberal think tank Tax Foundation in its International Tax Index competition placed Slovakia in 11th place out of 36 countries of the Organization for Economic Cooperation and Development (OECD), ”added Kuruc.

With the tax burden of the average wage, Slovakia is not in any way does not deviate from the standards in force in the countries associated with the Organization for Economic Cooperation and Development (OECD). “It simply came to our notice then the closer we get, the more the tax burden to the minimum wage. It is a common practice in Western countries: what the lower the wage, the lower the taxes and levies. The higher the salary, the higher taxes and levies, “said Kuruc from the Working Poverty Association. The weakest earning Belgians working for a gross minimum wage of EUR 1,593 they will pay the state only 59 euros per month in taxes and levies. Slovaks workers for a minimum gross wage of 580 euros will pay in taxes and levies up to 103.26 euros per month. The price of labor in this case is up to 784.20 euros. The difference between the price of labor and gross wages are levies paid employer.

People working for the minimum wage usually have all their net income minutes for consumption. “They bring sales to local entrepreneurs and help them grow, they can then employ more, “added Kuruc. More employees people will automatically be reflected in higher income for the population and support also the economic growth of the country. At the same time, higher labor costs can help transformation from a productive economy based on cheap labor to an economy built on services and innovation.

Beware of low pensions

High contributions weaken employment and add to trades. According to Slovak law, it pays to start working on a trade the most in January. In this case, small businesses can only pay health levies until September next year. In practice, a self-employed person can socially levies should not be paid for 18 months only if he requests a three-month deferral tax return. “People also need to realize that non-payment of levies It will bring them lower pensions and more money today means lower income in old age, “said an analyst at the Prognostic Institute of the Slovak Academy of Sciences Vladimír Baláž.

For this reason, too, work on a trade is on the edge and according to the Code the work of a company cannot simply transfer people from a permanent employment relationship for trade. Nevertheless, this is happening in large numbers and tens of thousands of workers people will therefore receive only minimal pensions in a few decades. The deductible levy in force in the past reduced health benefits levies and higher incomes did not affect the amount of their pensions in any way. At the same time, with the current health care system, it doesn’t matter how high contributions are paid by a person and every working person is entitled to the same health care.

Lower levies will help the economy

Analysts agree that reducing the tax burden will help the Slovak economy. “The reason for this is that they form in Slovakia long-term unemployed a large number of the total number of unemployed. Reducing the tax burden would help to increase it employment in the group. It would probably lead to that part contracts for agreements or forced trades would switch to permanent employment ratio, “said Alexei Dobrolubov, an analyst at the Employment Institute.

The current registered unemployment rate reached last December year level of 4.92 percent. He has been out of work for more than a year in Slovakia 57 364 people. In total, he can take up employment from employment offices 165 455 unemployed. At the same time, domestic companies did not know at the end of the year to fill 92 316 vacancies.

Facts about the minimum wage

  • The weakest people earning would earn monthly 41 euros more if they were still entitled to the same relief as in 2015
  • Five years ago, you became a minimum wage on taxes and levies took 10.8 percent and today up to 17.8 percent
  • People working for the minimum wage pay the state more for the abolition of the so-called deductible contribution item
  • According to a law passed in 2015 within deductible contribution reduced health contributions to people with an income of up to 570 euros per month

The beginning of 2015 was written and the left-wing Smer was at the top. He ruled alone and launched a major reform that reduced levies on more than 600,000 least-earning Slovaks. The minimum wage was then 380 euros and after the reform it increased by 19 euros net.

However, the levy item is getting weaker in the current direction the right-left government failed to sustain and with this year’s growth minimum wage to 580 euros gross, the levy ended forever advantage of the weakest earners. The team is growing at a minimum net incomes are rising, but not as they could as they pay more and more on levies.

“This year, I switched from a permanent employment relationship to a trade. It’s great, as my monthly salary has increased by about 102 euros, “ Emil Gombálek speaks for Pravda. The second year he helps with wood processing in Lučenec. His colleagues working for a minimum wage of 580 euros gross they have a net income of less than 477 euros. “I am a self-employed person services I invoice 650 euros. From this I will pay the minimum health contributions in amount of 70.91 euros and I will have 579.09 euros left, “praises Gombálek.

The high tax burden on people working at a minimum the salary is also drawn to the Council on Budgetary Responsibility. “For example, if the tax burden of the minimum wage in 2020 was the same as in 2015, in net terms, employees would receive 40 euros more per month, “ said the Executive Director of the Council’s Office for Budget Responsibility Viktor Novysedlák.

Bad tax mix

Just five years ago, it started operating in the economy a deductible contribution that reduced health contributions; and increased the net direct income of people with a monthly salary of up to 570 euros. Less on employers also paid contributions. However, the levy item will be in the next years did not valorise and its impact decreased. “The growth of the minimum wage, which increases the tax burden on employees and employers, it may not be the most optimal solution after taking into account all the effects. On the other hand, any reduction in taxes and levies has a negative impact on public budget and without taking additional measures on the expenditure side or budget revenues would widen the general government deficit, “ added Novysedlák. The public social and health care works from the levies system.

Domestic companies have been complaining about high taxes and levies for many years. “Issue is that in our country there is too much work tax and little ecological burden and annuities arising from the ownership of property, “said the association’s analyst Working poverty Milan Kuruc. If all tax revenues are calculated and levies in relation to gross domestic product (GDP), Slovakia is among the 9 least taxed countries in the European Union. “Even American neoliberal think tank Tax Foundation in its International Tax Index competition placed Slovakia in 11th place out of 36 countries of the Organization for Economic Cooperation and Development (OECD), ”added Kuruc.

With the tax burden of the average wage, Slovakia is not in any way does not deviate from the standards in force in the countries associated with the Organization for Economic Cooperation and Development (OECD). “It simply came to our notice then the closer we get, the more the tax burden to the minimum wage. It is a common practice in Western countries: what the lower the wage, the lower the taxes and levies. The higher the salary, the higher taxes and levies, “said Kuruc from the Working Poverty Association. The weakest earning Belgians working for a gross minimum wage of EUR 1,593 they will pay the state only 59 euros per month in taxes and levies. Slovaks workers for a minimum gross wage of 580 euros will pay in taxes and levies up to 103.26 euros per month. The price of labor in this case is up to 784.20 euros. The difference between the price of labor and gross wages are levies paid employer.

People working for the minimum wage usually have all their net income minutes for consumption. “They bring sales to local entrepreneurs and help them grow, they can then employ more, “added Kuruc. More employees people will automatically be reflected in higher income for the population and support also the economic growth of the country. At the same time, higher labor costs can help transformation from a productive economy based on cheap labor to an economy built on services and innovation.

Beware of low pensions

High contributions weaken employment and add to trades. According to Slovak law, it pays to start working on a trade the most in January. In this case, small businesses can only pay health levies until September next year. In practice, a self-employed person can socially levies should not be paid for 18 months only if he requests a three-month deferral tax return. “People also need to realize that non-payment of levies It will bring them lower pensions and more money today means lower income in old age, “said an analyst at the Prognostic Institute of the Slovak Academy of Sciences Vladimír Baláž.

For this reason, too, work on a trade is on the edge and according to the Code the work of a company cannot simply transfer people from a permanent employment relationship for trade. Nevertheless, this is happening in large numbers and tens of thousands of workers people will therefore receive only minimal pensions in a few decades. The deductible levy in force in the past reduced health benefits levies and higher incomes did not affect the amount of their pensions in any way. At the same time, with the current health care system, it doesn’t matter how high contributions are paid by a person and every working person is entitled to the same health care.

Lower levies will help the economy

Analysts agree that reducing the tax burden will help the Slovak economy. “The reason for this is that they form in Slovakia long-term unemployed a large number of the total number of unemployed. Reducing the tax burden would help to increase it employment in the group. It would probably lead to that part contracts for agreements or forced trades would switch to permanent employment ratio, “said Alexei Dobrolubov, an analyst at the Employment Institute.

The current registered unemployment rate reached last December year level of 4.92 percent. He has been out of work for more than a year in Slovakia 57 364 people. In total, he can take up employment from employment offices 165 455 unemployed. At the same time, domestic companies did not know at the end of the year to fill 92 316 vacancies.

Facts about the minimum wage

  • The weakest people earning would earn monthly 41 euros more if they were still entitled to the same relief as in 2015
  • Five years ago, you became a minimum wage on taxes and levies took 10.8 percent and today up to 17.8 percent
  • People working for the minimum wage pay the state more for the abolition of the so-called deductible contribution item
  • According to a law passed in 2015 within deductible contribution reduced health contributions to people with an income of up to 570 euros per month