RRZ: Most Budget Consolidation Measures Since 2023 Based on Revenue Increases

dnes 19:51
Bratislava, 20 October (TASR) – Consolidation packages adopted during the current parliamentary term have been composed of 79 percent revenue-raising measures, leaving only one-fifth of the total consolidation to spending cuts, the Council for Budgetary Responsibility (RRZ) pointed out on Monday, citing its latest calculations. The RRZ recalled that the first set of consolidation measures was adopted for 2024, contributing to a deficit reduction of €1.6 billion, or 1.2 percent of GDP, according to its estimates. „This consolidation was predominantly made up of revenue measures, accounting for as much as 93 percent of the total impact. These included, for example, a reduction in the contribution rate to the second pension pillar, an increase in employer health contributions, and the introduction of a higher bank levy," the council explained. In subsequent consolidation packages, the share of spending cuts increased, yet the majority still consisted of revenue-side measures. The RRZ calculated that revenue measures made up around three-quarters of the planned consolidation for both 2025 and 2026. The consolidation package adopted for 2025 is estimated by the RRZ to have an impact of €2 billion, or 1.5 percent of GDP. It included changes to value-added tax (VAT), particularly an increase in the standard VAT rate, and a rise in corporate income tax for the most profitable companies. Spending cuts were realised primarily through reductions in the child tax bonus and the parental pension benefit. „The currently debated consolidation package for 2026 is expected, according to RRZ estimates, to reduce the deficit by €1.6 billion (1.2 percent of GDP). It includes measures such as increased employee health contributions and higher social contributions for self-employed individuals. On the spending side, savings were primarily achieved in the state budget," the council stated. According to the RRZ, the main difference compared to the original proposal — which aimed for a roughly balanced mix of revenue and spending measures — lies in the shortfall of energy subsidy refunds and a more realistic estimate of the impact of savings in the state budget. mf
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