Ivan MiklošOktóber 2007 Slovakia: A story of reforms

GDP in % Public expenditures45,347,251,743,3 40,337,838,037,3 Tax quota II35,734,333,031,632,031,130,029,5 Balance of public finances-4,8-6,4-11,8-6,5-7,7-2,7-2,4-2,8-3,4 Gross public debt34,047,249,949,243,342,441,534,530,7

in % GDP growth4,14,25,468,3 Inflation 3,38,57,52,74,5 Unemployment rate18,517,418,116,213,3 Employment growth0,21,80,32,13,8 Real labor productivity growth 4,72,35,84,76,0 Current account balance of payments-7,9-0,9-3,4-8,5 -8,3

Comparison of old and new tax system

Income tax of individuals and dividend tax in EU countries

(ESA95, in % HDP) Direct taxes6,77%5,71%5,68%5,69%5,65%5,69% Income tax – individuals3,24%2,69%2,67%2,58%2,55%2,61% Income tax – corporate2,78%2,61%2,75%2,81% Tax collected through withholding0,75%0,42%0,26%0,30%0,29%0,27% Indirect taxes12,04%12,23%12,59%11,43%11,35%10,98% VAT7,53%7,80%7,94%7,58%7,25%7,13% Consumption taxes3,15%3,33%3,70%2,95%3,27%3,06% Property taxes0,51%0,50%0,48%0,41%0,38%0,35% Local taxes0,50%0,45%0,43% 0,41%0,38% Other taxes0,35%0,15%0,04%0,06%0,05% Total tax income18,81%17,94%18,27%17,12%17,00%16,67% Tax income in , in % GDP, ESA 95

(ESA95, in thousands of SKK) Direct taxes Income tax - individuals Income tax – corporate Tax collected through withholding Indirect taxes VAT Consumption taxes Property taxes Local taxes Other taxes Total tax income Tax income in 2003 – 2007, in thousands of SKK, ESA 95

in % Unemployment rate12,616,418,819,218,517,418,116,213,3 Employment growth-0,4-2,7-1,80,60,21,80,32,13,8 Unemployment development and employment growth in Slovakia in 1998 – 2006

GDP growth Employment growth Portion of R&D on GDP Tax quota II Soc. Exp./ GDP ALMP/ GDP ALMP/ Unemp. Exp. Germany0,9-0,346,840,229,50,8524,7 France1,60,353,845,831,20,7327,0 Belgium1,90,449,947,729,30,9225,9 Austria1,90,149,943,629,10,4321,6 average1,60,150,144,329,80,7324,8 Poland4,0-0,243,334,220 Czech republic 4,40,344,136,319,60,1325,8 Hungary4,30,249,938,620,70,2130,1 Slovenia4,00,547,240,724,3 average4,20,246,137,521,20,1728,0 Great Britain 2,50,944,738,526,30,1620,0 Ireland5,12,934,132,2170,4930,9 Average3,51,439,435,421,70,3633,2 Estonia9,01,233,231,013,40,0417,2 Latvia7,91,933,629,213,30,1550,2 Lithuania9,01,536,029,612,6 Average8,61,534,329,913,10,1033,7 Slovakia5,61,137,129,517,20,0715,2 Comparison of groups of countries