Country Study, Slovenia Winning the Transitional Economies Race — страница 5

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$5 Bill.).[41] A significant portion of the expenditures are allocated for health, education and infrastructure. Revenues for 1996 were expected to be 582 billion Tolars, about 46.5% of Slovenia’s GDP.[42] The surplus is allocated to cover the Pension and Invalidity Insurance Funds, this action preempts the expected expenditure of 42 billions Tolars in 1997 towards the Pension Fund which is a 20% increase from 1996.[43] One-third of the budget will be spent on Civil Servants salaries and contributions, much higher that the 1995, due to the desire to increase public employees salaries. Nearly 11 billion Tolars will be spent on subsidies to exporters for social welfare contributions, technological development, and for maintaining current levels of employment.[44] Although, there

were no current figures available concerning defense expenditures figures from 1993 show 13.4 billion Tolars were allocated for the military, about 4.5% of the GDP.[45] Finally about four million Tolars are allocated for liabilities in international agreements to members of the Paris Club and commercial banks; this is a new item in the budget.[46] However, the current expenditures are being met by disapproval from the Slovenian businessmen, who wanted a budget for 1996 to be equivalent to the 1995 budget. This demand was not possible for Slovenia, as it tries to battle inflation, unemployment and provide for its’ citizens welfare. Tax Structure and Administration Intergovernmental Financial Relationships Slovenia has had relative success with the administration and collection

of taxes from its citizens and corporations at all levels of government.. Article 147 of the Constitution states very generally: " the state shall levy taxes, custom duties and other charges in accordance with statute. Local government bodies shall levy taxes and other charges in such circumstances as are determined by this Constitution and by statute."[47] This constant flow of funds has allowed the government to continue to provide needed services, as well as end several years, since independence, with budget surpluses. The country has tried to diversify the tax base, which has also added to the increased stability of the tax base. Administration The Slovene government is making extra efforts to insure successful implementation of tax policy. Slovenian tax

administrators are taking part in the OECD’s multilateral tax network program which provides advice on taxation practice, policy and systems, with workshops for administrators in member countries such as Austria, Denmark, Hungary and Turkey. In addition, this program will evaluate the countries after the year is over, regarding their effectiveness in implementing tax policy. A key factor that has aided in the current implementation of the tax system is that the Slovenian Tolar is internally convertible, and therefore, foreign investors or business dealing can take place easily in foreign or domestic currency. In 1997, Slovenia intends to unify the tax administration offices. Currently, there are two tax collection services, one for the companies and one for the individuals.[48]

In addition, according to OECD, in the next two years there will be significant changes in the tax policy and administration in Slovenia. Currently, the tax year runs from 1 January to 31 December, with tax returns to be filed by 31 March of the following year (15 April for a consolidated return).[49] In general, the system depends on self-assessment, however, if there is falsification of earnings or evasion of taxes, the government assesses heavy penalties. The government, although requiring penalties for late payments is being realistic in the charges it assess for tardiness. A new act was passed in 1995, which reduced the late payment fees from 25% of amount owed to 18% on all public aged debt including income tax, sales tax and social security late payments.[50] The tax

administrators have developed a system which allows for advance payment of taxes and deadlines that apply to readjustment of taxes. Balances due on taxes must be paid five days after the annual return has been filed and if readjustments are made then the company has thirty days to make the payment.[51] Corporate Tax and Incentives As of 1995, the corporate tax rate was at 25%.[52] The republic has made a large effort to keep the business environment attractive to foreign investors. However, the rates were increased to 30% by 1996 and now legislation is trying to reduce the amount to 25% once again; the reduction in taxable income due to re-investment exemptions could make the effective rate 20%, if legislation goes through.[53] Slovenia continues to honor double taxation treaties