Slovakia sets budget deficit at 4.94 percent and delays tax abolition

The Slovak government coalition agreed on a state budget deficit of 4.94 percent of gross domestic product for next year, while postponing the elimination of the controversial transaction tax until December 31, 2027, according to announcements by the Government Office of the Slovak Republic and Finance Minister Ladislav Kamenický.

Slovak Coalition Sets Budget Deficit at 4.94 Percent

Following a coalition council meeting at the Government Office of the Slovak Republic, officials finalized the framework for next year’s state budget. Finance Minister Ladislav Kamenický described the resulting 4.94 percent GDP deficit as a compromise between state resources and coalition priorities.

Kamenický stated that the current administration will hand over public finances with a deficit roughly the same as when it assumed office. He added that the fiscal plan does not involve broad ministerial cuts, tax hikes, or payroll levy increases.

At the same time, opposition figures criticized the fiscal trajectory. Progressive Slovakia leader Michal Šimečka called the nearly five percent deficit and the delayed tax repeal a devastating message for the economy and businesses.

Transaction Tax Postponed to 2028

The coalition agreement establishes that the financial transaction tax will remain in place throughout 2027, with abolition scheduled specifically for December 31, 2027, according to statements from the Slovak National Party and the Ministry of Finance. Minister Kamenický acknowledged that retaining the tax for the upcoming year generates roughly half a billion euros in revenue, funds that are required to meet coalition demands and maintain ongoing state expenditures.

The Slovak National Party pushed for the eventual removal of the levy. Andrej Danko stated that while the tax possesses specific technical constraints requiring a delayed timeline, he appreciates the finance minister’s willingness to schedule its termination.

Conversely, the Freedom and Solidarity party rejected the compromise entirely. The opposition party characterized the delayed repeal as a dismissal of public concerns, emphasizing that the levy will continue to pressure companies and citizens.

Slovakia Increases Pensions for Seniors Aged 85 Plus

Alongside the tax and deficit terms, the coalition agreed on targeted social measures. The Slovak National Party announced that every senior citizen aged 85 and older will receive a guaranteed monthly pension of at least 700 to 708 euros, regardless of their prior earnings history.

Minister Kamenický confirmed that the budget preserves funding for thirteenth pensions, wage valorization, drought relief measures, and transportation initiatives. Additional allocations include five million euros annually returned to the Ministry of Culture budget from ticket sales on cultural events, as well as continued subsidies for household energy costs.

Administration Faces October 15 Budget Submission Deadline

The administration faces a statutory deadline of October 15 to formally approve the budget proposal and submit it to the National Council of the Slovak Republic. Concurrently, lawmakers debate separate proposals regarding fiscal rules for local governments, with a parliamentary majority requiring ninety votes to adjust debt brakes for regional municipalities amidst uncertain legislative support.