Debate over tax sovereignty heats up in Slovakia[fr][de] 

A draft declaration , to be submitted to Parliament by the Christian-Democratic Movement (KDH) in May, declares “the sole authority of the Slovak Republic to decide on the personal income tax and corporate taxes”.

The declaration urges Bratislava to reject “any legally binding acts and other acts of the European Communities and European Union that might concern the harmonisation of such taxes, of their tax base, structure or system…or against any motion to set a new (European) tax”.

Harmonisation of taxes, it is argued, would undermine the subsidiarity principle and harm Slovakia as well as the European economy.

The move comes amid concerns over possible attacks on the country’s favourable ‘flat tax’ regime which has fuelled its booming economy but caused worries of unfair competition from high-tax countries in Western Europe.

Opposition parties were alarmed when Prime Minister Robert Fico stated in March that Slovakia could not avoid discussing its advantageous tax system if the big EU countries were to push for harmonisation.

The KDH has already tried to gain support for the declaration in autumn last year, but ended up being defeated. And although members of the government coalition say they are against EU tax harmonisation, they indicated that they would not support the declaration. Even if it was adopted, the declaration would probably not be legally binding, observers agree.

The Commission launched a debate over environmental tax reform with the launch of a Green Paper on 28 March. The paper looks at possibilities such as shifting the tax burden away from labour to environmentally damaging activities (EurActiv 29/03/07). Separate discussions are also taking place over a common consolidated corporate tax base (CCCTB) with a possible introduction at the end of 2008 (EurActiv 3/04/06).

Any decision on tax harmonisation at European level would have to be adopted with unanimity from all 27 member states, making it particularly complicated to agree on.

EurActiv.sk  contributed to this article (see original version ).