Economy Ministry on Business Environment Development in Slovakia
BRATISLAVA, December 14, (SITA) - The corporate sector has perceived the level of employers' contributions to social and health-insurance funds and the administrative burden as one of the most significant obstacles to business development over the past few years. This information comes from a report on the situation in Slovakia's businesses environment including improvement proposals, elaborated by the Economy Ministry. The last significant cut in social insurance contributions took place on January 1, 2004, when the compensation duty for the first ten days of lost income due to sickness leave was transferred form the social security provider Socialna Poistovna to the employer. "Social insurance contribution rates have not been changed form that time to date, which can be considered positive in terms of stabilizing the Slovak system of employers' contributions to social and health-insurance funds," stated the ministry.
The negative assessment of rates of these contributions on the part of the corporate sector overtook the perception of such chronic problems as weaknesses in law enforcement, corruption in the public administration, or frequently amended laws, reads the report. Binding of the calculation base of contributions to social and health-insurance funds to the minimum wage causes the burden to increase each time the minimum wage is increased. "This is not only about rates of contributions. Small businesses have more serious problems with frequent changes of external condition, non-transparent system and administration linked to employment and payment of contributions, according to the paper. Another threat for businesses is the risk of regressive sanctions for unintentional violation of rules and complicated system of premiums payment within obligatory insurance of employees.
On the whole, the business environment has reported significant changes mainly with positive implications on business over past years. The ministry mentions as an example the introduction of tax reform, adjustments in application of active labor market policy and a new law on bankruptcy and restructuring. "Last year's most important changes were the new law on public procurement, the raised percentage of flat-rate costs for people working on a trade license and the removal of illegal work with assisting family members, states the paper. The ministry called this year's far-reaching revision of the Labor Code, valid from September 1 of this year as the main modification in this area.
The ministry claims to have reached minimum progress within the improvement of a legislative framework that influences the business environment in 2006. Unclear and frequent changes to legal norms can only be removed through implementation of system measures such as assessing impact of rules on business environment and consulting the corporate sector as soon as in the phase of preparation and drafting of bills. Despite expended efforts and elaboration of uniform methodologies for impact evaluation by Ministries of Economy, Finance, Labor, Social Affairs and Family and Environment, we failed to elaborate and introduce a comprehensive methodology for assessing impacts of rules, the Economy Ministry admitted.
Slovak President Signs into Law the Bill on Euro Adoption in Slovakia
BRATISLAVA, December 13, (SITA) - Slovak President Ivan Gasparovic signed into law the draft bill on the euro introduction in Slovakia, the so-called General Law. It defines conditions of dual circulation, exchange and usage of banknotes and coins, non-cash transactions and postal system of payment, conversion of property values and financial amounts, and sets out the continuity for legal relations, reference interest rates, exchange rates and indexes, dual displaying of prices, payments and other values. The law sets mechanisms aimed at supervision over rules and duties in the conversion of Slovak crowns to euros and enables fines of EUR 1,500 for natural persons and EUR 15,000 for corporate entities for a violation of the law.
Banks will be obliged to exchange Slovak currency coins for six months and banknotes for twelve months from the day of euro adoption. The National Bank of Slovakia will exchange coins for a period of five years and banknotes indefinitely. The period of dual cash transactions, during which both Slovak crowns and euro will be accepted but only euro returned, will last sixteen days from the date of euro adoption. The beginning of dual pricing begins thirty days after the day of conversion rate is determined and ends a year after euro adoption. The prices can be displayed in both currencies even for a longer time, if stores wish so.
The general law simultaneously amends other laws, and the biggest changes can be expected in the law on the National Bank of Slovakia. It also amends the law on securities and investment services, foreign exchange law, the Commercial Code and the law on supervision over the financial markets.
The law is to come into effect on January 1, 2008. Some of its provisions will be valid as of the date of conversion rate determination. It is expected that this will be between June and July 2008. Most provisions will take effect as of the day of euro adoption, which is expected on January 1, 2009.
Parliament Passes Law on Euro Adoption in Slovakia
BRATISLAVA, November 28, (SITA) -- The Slovak Parliament passed on Wednesday the so-called general law, or law on euro adoption, in the Slovak Republic. The law sets out terms for dual circulation, exchange and usage of banknotes and coins, non-cash operations and postal system of payment, conversion of property values and financial amounts, and sets out the continuity for legal relations, reference interest rates, exchange rates and indexes, dual displaying of prices, payments and other values. The law sets mechanisms aimed at supervision over rules and duties in the conversion of Slovak crowns to euros and enables fines of EUR 1,500 for natural persons and EUR 15,000 for corporate entities for a violation of the law.
Banks will be obliged to exchange Slovak currency coins for six months and banknotes for twelve months from the day of euro adoption. The National Bank of Slovakia will exchange coins for a period of five years and banknotes indefinitely. The period of dual cash transactions, during which both Slovak crowns and euro will be accepted but only euro returned, will last sixteen days from the date of euro adoption. The beginning of dual pricing begins thirty days after the day of conversion rate is determined and ends a year after euro adoption.
The general law simultaneously amends other laws, and the biggest changes can be expected in the law on the National Bank of Slovakia. It also amends the law on securities and investment services, foreign exchange law, the Commercial Code and the law on supervision over the financial markets.
The law is to come into effect on January 1, 2008. Some of its provisions will be valid as of the date of conversion rate determination. It is expected that this will be between June and July 2008. Most provisions will take effect as of the day of euro adoption, which is expected on January 1, 2009.
Parliament Approves New Energy Taxes from July of 2008
BRATISLAVA, November 28, (SITA) - As of July of next year, suppliers and consumers are to pay excise tax on electricity, coal, and natural gas, according to the draft bill on excise tax on electricity, coal, and natural gas, which the Slovak Parliament approved on Wednesday. Households are to be exempt from this tax.
Electricity tax is to represent SKK 0.02 per kilowatt hour (kWH) from July 1, 2008 until the end of 2009. As of 2010, the tax should double. Apart from households, electricity consumed to manufacture of products for which electricity costs represent more than half the total production costs, are to be exempt from this tax. This tax also does not to apply to energy produced from renewable resources.
The tax tariff on natural gas is to differ depending on its use as of next July. The tax on gas used as motor fuel is to represent SKK 4 per cubic meter from July of 2008 to the end of 2009. For gas used for heating, tax should represent SKK 0.20 per cubic meter in the same period. As of 2010, this tariff is to double. Electricity produced from natural gas, as well as natural gas used for production of compressed NCG used as motor fuel, is to be exempt from the tax duty, too. As of July 2008, tax tariff on coal is to be SKK 320 per ton.
According to the Economy Ministry, taking into account the large scope of exemptions from tax duty, as well as the excise tax level, general government finances will not be significantly influenced. Estimated revenues from excise taxes on electricity, coal and natural gas in 2008 are SKK 300 million.
Parliament Definitely Approves Amendment to Social Insurance Law
BRATISLAVA, November 27, (SITA) - On Tuesday afternoon, the Slovak Parliament definitely approved the vetoed amendment to the law on social insurance, which President Ivan Gasparovic had returned to parliament earlier in November. The deputies accepted the proposal of the head of the state and left the paragraph enabling entry into the capitalization second pension pillar of the pension saving system in the first half of next year. The deputies also omitted from the bill the paragraph proposed by opposition deputy Iveta Radicova that does not enable entry into the old-age pension system, with exception of young people taking up their first job. Before the parliamentary vote, however, Ms. Radicova pointed out that if the parliament was to approve the amended draft, opposition deputies would turn to the Slovak Constitutional Court and request a preliminary suspension of effectiveness of the approved amendment. According to Ms. Radicova, the amendment contains several unconstitutional paragraphs, for example extension of the minimum saving period for pension eligibility in the second pillar from the current ten years to fifteen.
President Gasparovic had returned the flawed amendment to the social insurance law to the parliament, reasoning that the amendment contained contradictory provisions as a result of chaotic voting. Parliament's legislative office, however, first did not incorporate in the bill the amending proposal of Iveta Radicova that was in contradiction with the previously approved text though deputies voted for it. Speaker of Parliament Pavol Paska instructed parliament's legislative department to omit the provision. However, under pressure of the opposition that threatened to initiate his recall if he sends the unlawfully altered version to the president for signing, Mr. Paska backed down and the president ultimately got the law with both contradicting paragraphs just as it was approved.
The amended social insurance law will open the second pillar for the more than 1.5 million savers who have entered the old-pension saving system since January 2005. From January 1 to June 30 of next year, they are to be given the opportunity to return from the second pension saving pillar in the two-pillar system to the exclusively go-as-you-pay financed system administered by the state-run Socialna Poistovna social security provider. As of next year, the second pension pillar will be voluntary for young people who were born after December 31, 1986. Young people will thus get the chance to decide whether to enter the second pillar within six months of taking up their first job. The amendment also cancels payment of pension saving contributions by the state for receivers of disability pensions. However, the state will continue paying for persons on parental leave and persons taking permanent care of a dependent relative who are savers in the second pillar.
Moreover, the amendment extends the minimum saving period for pension eligibility in the second pillar from the current ten years to fifteen. It also introduces stricter conditions for early retirement. A person will not be eligible for early retirement pension sooner than two years before he/she reaches retirement age.
As of next year, the maximum calculation base for insurance premiums will be increased from the current three-fold to four-fold the average wage. However, insurance premiums paid from sums exceeding three-fold of the minimum wage will not be taken into account upon calculation of pensions or unemployment welfare.
In October, a petition was handed to the Slovak Parliament with over a hundred thousand signatures to protect the second pension pillar introduced as part of pension reform by the previous government against changes that would harm the current savers. The petition committee wanted parliament to discuss the petition prior to a debate on the amendment to the law on social insurance. This has not happened and the pension system was changed regardless of the petition.
BRATISLAVA, November 27, (SITA) - Prime Minister Robert Fico brought an official proposal to President Ivan Gasparovic to appoint Zdenka Kramplova to the post of Agriculture Minister on Tuesday. Mrs. Kramplova was nominated by the People's Party - Movement for Democratic Slovakia (LS-HZDS) after President accepted a proposal from the prime minister to recall Miroslav Jurena from the post of agriculture minister.
Prime Minister Fico justified his decision to replace the minister because in his opinion Mr. Jurena bears undeniable political responsibility for the case of scandalous land transfers at the Slovak Land Fund (SPF), because he had the right to appoint and recall the fund's deputy director who signed the disputed contracts. The events around SPF caused the biggest coalition crisis of this government so far. LS-HZDS considers Mr. Jurena's recall a breach of the coalition agreement. Mr. Jurena will serve as a parliamentary deputy. He is the first minister of the Fico's cabinet, who has been recalled.
Mrs. Kramplova studied at the Agriculture University in Plovdiv, Bulgaria. She served as minister of foreign affairs in the government of Vladimir Meciar between 1997 and 1998. She is the central secretary of the LS-HZDS. She is married and has two children.
Social Partners Discussed Changes in Employment Services Law
BRATISLAVA, November 26, (SITA) -- The Social Partnership Council (HSR) debated a draft amendment to the law on employment services at its session on Monday without any serious exchanges of opinions, informed the Trade Unions Confederation's Vice-President Vladimir Mojs. "This revision is aimed at curtailing bureaucracy, since the long-term unemployed will no longer be required to report at labor offices every week," he said. Mr. Mojs hopes that as a result of this measure, labor office clerks will have more time to work with the unemployed. According to the revision, labor offices themselves should determine how often registered job seekers would be required to report at the office and produce evidence that they are really searching for a job. Unemployed citizens should visit labor offices at least once a month.
However, Vice-President of the National Association of Employers Jan Sabol is afraid that softening of duties for the long-term unemployed related to frequency of their visits to the labor offices can be counterproductive. The current regime makes it harder for Slovaks working abroad to simultaneously report as unemployed and draw social benefits in Slovakia.
Ministry Publishes First Tender to Complete D1 Highway Via PPP
BRATISLAVA, November 19, (SITA) -- Slovakia is going ahead with the plan to award concessions to build and operate highways using Public-private partnership. The Slovak Transport Ministry has published an announcement on its intention to award concessions for works on the implementation of the first package of the select stretches of the D1 highway through Public-Private Partnership Projects in the EU Official Journal on Saturday, November 17. The concession will be granted for project documentation, construction, funding, operation and maintenance of the D1 highway's five stretches Dubna Skala - Turany, Turany - Hubova, Hubova - Ivachnova, Janovce - Jablonov and Fricovce - Svinia at the total length of 74.84 kilometers. The concession will expire in thirty years at most. Tender terms, however, do not specify the estimated net value of the concession. The Transport Ministry said some time ago that it is SKK 49.1 billion without VAT. This sum represents SKK 656 million without VAT per one kilometer of construction, operation and maintenance of the aforementioned planned D1 stretches. The procurer set the deadline for potential bidders to deliver offers for January 8, 2007 .
The ministry announced that the procurer would asses the bids based on the criterion of the economically most advantageous bid while the criteria are the net current value of the offered nominal payments for accessibility, feasibility and terms of the proposed funding.
The estimated price of the second prepared PPP package for construction of a 47 km stretch of the R1 dual carriageway between Nitra and Tekovske Nemce is SKK 16.666 billion (without VAT). According to the Transport Ministry, the tender for this package should be announced two weeks after the first. The price of the potential third PPP package, aimed at construction and operation of 29 km of the technically most demanding sections of the D1 highway between Zilina and Martin, is estimated at SKK 39.867 billion. The total estimated value of the three planned packages of PPP projects for construction and operation of 151 km of the D1 highway and R1 dual carriageway sections is SKK 105.6 billion (without VAT).
