Since 2006, capital income, i.e. interest, dividends and other profits, including rentals and real estate sales, are not included in the income tax base. Foto: Reuters
Since 2006, capital income, i.e. interest, dividends and other profits, including rentals and real estate sales, are not included in the income tax base. Foto: Reuters

The Akrapovič company, a successful manufacturer of exhaust systems, therefore decided to pay off all retained profit, and to directed part of it to other business environments. The reactions of Prime Minister Marjan Šarec and his adviser, Vojmir Urlep, suggest that Akrapovič's move may be premature.

Economic associations have offering responses and statements on the post-election coalition and the expectations of the new government with almost record-breaking speed this year, almost immediately after the elections. The coalition agreement received a mixed response, but it contains some additional burdens for entrepreneurs. Prime Minister Marjan Šarec reiterated that irrespective of coalition's plans, fiscal restrictions should be taken into account and dialogue should be conducted. President of the Managers' Association of Slovenia Aleksander Zalaznik says that the economy is bothered by plans for taxing higher capital gains. "But we believe that the plans will be re-shaped into a more normal form than in the coalition agreement."

Due to the draft on higher taxation of capital gains in the coalition agreement, the Levica party joined the public debate to support the measure, while the Chamber of Commerce and Industry opposes it on behalf of its membership. The latter also urged the coalition to respond to statements made by Levica and thus to express opinions on higher taxation. Prime Minister Marjan Šarec and his main consultant, Vojmir Urlep, attempted to calm down the debate with a written statement, arguing that quick reactions of the private sector to the content of the coalition agreement even before key representatives of the economy have had the opportunity to get additional explanations, are a bit premature.

Since 2006, capital income, i.e. interest, dividends and other profits, including rentals and real estate sales, are not included in the income tax base. The coalition agreement has stirred up the private sector as it stipulates that income from capital should be considered as income tax again. Tax adviser Darko Končan would like to see the fiscal council and the new government prepare a broader tax consultation on possible measures. Entrepreneurs also hope the measures will be re-considered.

The current and likely new Minister of Economy, Zdravko Počivalšek, has already responded. He called for a dialogue to convince the business sector that the economic environment will not change in such a way that businesses should consider moving abroad. The minister is aware of the importance of a predictable and stable business environment, which can be the only real foundation for a successful economy. "Some quick initial reactions are premature," added Počivalšek.