Ministry of Finance of the Slovak republic, Štefanovičova 5, 817 82 Bratislava, IČO: 00151742. www.mfsr.sk

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IFP: Weakening inflation cuts into tax revenues

Tax and levy revenue growth will weaken in the upcoming years, due to slowing inflation and the impact of legislation, especially the reduction of VAT for the catering sector. This year, the Ministry of Finance of the Slovak Republic expects tax and levy revenue growth of eight percent.

The economy will avoid a recession in 2023, but tax and levy revenues will decrease by approximately half a billion euros compared to the approved budget. The reason for this is inflation, which will slow down to 5.3 percent next year and get back to two percent by 2026, which will mitigate the rise in the prices of food, goods and, later, services. Recent legislative changes are also behind this decline. These include, in particular, the reduction of VAT to 10% in the sectors of gastronomy and sport recreation. However, the efficiency of VAT collection will stay at the high values last achieved in 2005 and 2006. The smaller growth of tax and levy revenues is also positive news for citizens' wallets, as the decreasing inflation will put less pressure on household spending and, as the macro forecast has already shown, will result in the growth of real wages (by 0.6% compared to the 2.7% decline expected in September).

Full commentary, as well as the latest tax forecast can be found here. 

Press Department
Ministry of Finance of the SR

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Ministry of Finance
of the Slovak republic

Štefanovičova 5
P. O. BOX 82
817 82 BRATISLAVA
IČO: 00151742

+421 2 5958 1111
podatelna@mfsr.sk

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