Slovakia should collect 233 million euros ($300 million) less in taxes next year, causing a need for more austerity as the eastern euro-area member seeks to trim the budget deficit, Finance Minister Peter Kazimir said.
The revision, representing 0.3 percent of gross domestic product, was driven by worsening prospects for economic growth and lower-than-estimated corporate-tax receipts last year, Kazimir said at a press conference in the Slovak capital, Bratislava, today. In 2012, tax collection will fall 209 million euros short of plan, the ministry projects.
Lower tax receipts jeopardize Premier Robert Fico’s efforts to bring the fiscal gap below the European Union’s limit of 3 percent of GDP as early as next year to halt contagion from the sovereign-debt crisis. The government will cut spending to make sure the euro-area member since 2009 will meet its fiscal goals “at any price,” Kazimir said.
The government has already adopted revenue-boosting measures worth 300 million euros in 2012 and 1.2 billion euros next year such as changes to the pension system and introduction of special levies for selected industries. The administration is working on legislation, which shall bring almost 500 million euros more in 2013, mostly from higher income tax rates.
The 2011 budget deficit will probably be revised to 5 percent of GDP, from 4.8 percent originally reported, Kazimir also said. The budget for this year targets the gap at 4.6 percent of GDP.
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