Slovaks Need Deeds, Not Words

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If an Alien tried to form an opinion on any given business environment based on nothing but statements from our politicians, he would end up with the conclusion that we are a flourishing business paradise. Governments have never spared nice words and praiseworthy intentions in their manifestos. Government officials attending conferences, annual meetings or entrepreneurial business sessions claim to fight for a favorable and stable business environment, portraying it as one of the key objectives of the government, along with the simplification of laws and their subsequent application, the simplification of the system of tax duties, and an ease on the administrative and financial burdens imposed on businesses.

However, comparing the reality with these sugarcoated string alongs could not reveal a greater contrast, a thread repeatedly voiced along the lines of these commentaries. It is not even worth repeating that despite numerous declarations of planning for an improvement, almost all entrepreneurs in Slovakia feel that the conditions only keep getting worse. Instead of fixing the problem, politicians try to appease us with seemingly convincing arguments of the opposite.

Those responsible have been absurdly trying to persuade us for years that discontent is not justified when it comes to the often criticized tax burden. The most recent analysis of the OECD on income tax may open their eyes. The analysis includes a chart of individual countries ranked by their levels of income tax. The higher the position of the country in the ranking, the more a given state claims of the total cost of the work, from both the employer and employees). In Slovakia, the state aggregately takes more than a half of one´s income – 42%, including VAT and consumer tax. While 23 countries of the OECD operate with lower levels of income tax, only 11 countries reportedly levy a higher burden on the incomes of their populations. When comparing the tax burden of Slovak companies, there is almost no difference between them and Slovak citizens, as the State takes more than a half of their profits as well.

In another “ranking of shame” published by the Swiss Liberal Institute in March, Slovakia managed to rank even higher. This so-called ‘ranking of tax oppression’ takes into account the criteria sorted in three groups: tax burden, the quality of the public sector, and the personal and economic freedom of citizens. Slovakia has been ‘honored’ with the 10th position on the list of the dozen worst countries of the OECD.

Why do conditions for doing business and entrepreneurship keep deteriorating when politicians are trying to convince us on a daily basis that they want to improve them instead? No deeds follow their words. Although the government pretends to listen to our concerns, they do not usually take them into account and, ironically, end up doing the exact opposite. A quick look at the data regarding legislative amendments we proposed speaks for itself.

The government has introduced 20 laws of generally high importance to us in the past year while our proposals have merely been accepted in a dire couple of occasions. Although a few others have been accepted partially, the majority of our proposals has been rejected.

What can we do about it? We need two things to make a real difference. First of all, we need to implement the so-called ‘better regulation system’, which would establish real responsibility for the simplification and improvement of laws, including mechanisms of effective control. Secondly, we have to make it the top priority of the government, its heads of departments and all administrative officials. So far, Slovakia has been lacking both.

Translated by Adam Štrauch

Jan Oravec