Parliament supports lower taxes on income and capital gains, lower maximum tax rate
STAMarch 11, 202 – On Friday, the National Assembly approved amendments to the Personal Income Tax Act, which bring higher salaries, lower capital gains tax and a lower maximum tax rate.
The law was planned for the end of last year, but was postponed because the coalition did not have a majority in parliament and because of the referendum threat advocated by the left.
However, after Prime Minister Janez Jansa pointed out in January the possibility of holding a referendum together with the April elections, the Left abandoned the plan and said it would try to amend the legislation after the elections.
Today, 45 voted in favor and 40 against, while the missing votes were cast by MPs from the National Party (SNS) and the Pensioners’ Party (DeSUS), which are opposition parties but prefer to vote with the government.
Central to the legislation is the gradual increase in the general tax relief to which all taxpayers are entitled. By 2025, it will rise from the current level of 3,500 euros to 7,500 euros.
According to the calculations of the Ministry of Finance, the average salary in 2022 would reach 260 euros more, in 2023 520 euros, in 2024 780 euros more and in 2025 1000 euros more.
The tax rate in the highest income class, for those earning more than 72,000 euros a year, will be reduced from 50% to 45%, and income tax brackets will be indexed to inflation.
The tax rate on interest income, dividends and profits was reduced from 27.5% to 25%, and after 15 years of ownership, the status of tax-free is established.
Rental income tax will be reduced from 27.5% to 15%, which is related to the reduction of standard costs.
There will be some other tax breaks for the elderly, those over 70, firefighters and civil protection workers, and employers who employ people under the age of 29 or over the age of 55.
The government described tax cuts as a much-needed relief in Slovenia’s high-tax business environment that will boost competitiveness and ensure sustainable economic growth, while business organizations welcomed the possibility of lower labor costs for highly skilled occupations.
The center-left opposition and trade unions, however, called the legislation a gift to the rich, which will impoverish the tax coffers and make it more difficult to fund social programs.