The Slovenian government adopted a proposal to expand tax breaks for investment and lower the corporate income tax rate in a bid to cope with the fallout from the world financial crisis.
According to outgoing Prime Minister Janez Jansa, the measures proposed by the government should provide "extra oxygen" for business and enter into force before the end of the year, the Slovenian news agency STA reported.
The government suggests increasing the existing 20 percent tax break for research and development to 40 percent and a reintroduction of a general 30 percent break for investments, said the reports.
The top corporate income tax rate would be lowered from 22 percent to 20 percent this year, 19 percent in 2009 and to 18 percent in 2010 and beyond.
Jansa told the press after the cabinet session that the tax breaks will be especially helpful to companies which will have to reduce output due to lower demand -- they will be able to switch to alternative products for another industry. He said that this in particular affected hundreds of car industry suppliers.
The measures will cut into the budget, with the 2008 costs expected to be covered with the projected 240 million euros (some 307 million U.S. dollars) surplus. In 2009 the funds could be provided by increasing the deficit to the level still allowed under the EU's Stability and Growth Pact or through saving.
"We propose a combination of both measures," Jansa said.
Source: Xinhua
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