What are the positives and negatives of Matovic’s tax revolution?

Matovic’s tax revolution brings several positive elements. For example, the introduction of group taxation will allow firms within the same group to offset losses of one firm against profits of another firm and at the same time relieve them of the obligation to pay attention to transfer pricing regulation. However, a number of the proposals put forward have brought mixed reactions from the public. Peter Varga gave an interview to Startitup on this topic.

According to Petr Varga, the reform is not just an invention of this government. A number of proposals have existed for a longer period of time. He also sees the reform as an effort to introduce a greater degree of fairness into Taxation / drainage. There is now a huge disproportion between employees and the so called. office tradesmen. These sole traders benefit from generous lump-sum expenses and pay an effective tax and levy rate of perhaps around 15% (up to 10% for levy holidays). Whereas ordinary employees are much worse off. And yet tradespeople do not lose out on important social insurance benefits (old-age pension, maternity, pregnancy benefits) and save hundreds of euros a month at the expense of public finances.

Positive features of the reform:

• simplification of the system
• group taxation (i.e. netting of losses, elimination of transfer pricing)
• lower tax rate
• striving for greater fairness

Negative features of the reform:

• property tax (illusion)
• exuberant social transfers
• charging university fees for working students

Anyway Peter Varga is very sceptical about whether the state as we have known it for a long time (except perhaps the 2nd Dzurinda government) is capable of implementing such a tax and levy reform. It would be extremely technically complex, not only from a §§ point of view, but also from an information point of view. After all, the Social Insurance Institution has been unable to introduce even an annual settlement of insurance premiums for several years.

Full interview: An expert has dissected Matovič’s reform to the bone. The part with tradesmen has succeeded, surprised the expert (INTERVIEW)

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