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Slovakia against EU tax harmonisation

23 February 2011, 18:51 CET
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(BRATISLAVA) - Slovakia will not support tax harmonisation within the EU as proposed by the Franco-German competitiveness pact for the eurozone, Slovak Finance Minister Ivan Miklos said Wednesday.

"We have a serious problem with harmonisation of corporate income tax within the EU," Miklos told reporters.

"We wouldn't mind if the corporate tax was harmonised in line with the Slovak model but we're afraid it's not realistic to think we'll be able to reach a compromise that won't adversely affect our tax system," Miklos said.

Slovakia, has a low 19-percent rate for both corporate and income tax which is regarded as being attractive to foreign direct investors and having increased the nation's tax base by drawing individuals out of the 'grey' or unofficial economy.

The ex-communist state of 5.4 million whose economy is largely driven by the auto and electronics sectors joined the eurozone in 2009.

Miklos also said that Slovakia wants a new principle for financial participation in the future European Stabilisation Mechanism -- worth 500 billion euros ($686 billion) -- due to be the permanent loan mechanism for indebted countries as of 2013.

"We think that the principle of countries contributing according to their GDP and population that has been created for the current European Financial Stability Facility (EFSF) is illogical and unfair," Ivan Miklos said.

"The participation of a country should depend mostly on its GDP or on the strength of its financial sector and the country's debt -- because the higher the debt, the more likely it will need the loan," he said, adding that this view is also shared by eurozone members Slovenia and Estonia.

Slovakia was the only eurozone member to refuse to participate in the emergency loan to indebted Greece last year.

"We realise the importance of unity and solidarity within the eurozone and we are ready to participate in the European Stabilisation Mechanism" with certain changes, Miklos added.


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