No more tax exemption for pension savings says Miklos

The Ministry of Finance has started playing with the idea of cancelling the right to have savings in the 3rd pension pillar exempted from tax. This comes as finance minister ivan Miklos desparately seeks ways of filling the huge hole in public finances and so cut the deficit by an ambitious EUR 1.7 billion next year.

If the move is pushed through, it could deprive each saver in the supplementary-insurance system around EUR 80 a year, but help contribute to cutting the deficit by some EUR 60 million. The four coalition parties all back the proposal and will vote in favour in parliament.

On the other hand, taking away the privilege of tax exemption has, naturally, met with strong opposition from the pension management companies (known as DSS in Slovakia), arguing that people will not have any incentive to save in the 3rd pillar. The move was also strongly criticised today, 12 August, by MP for SMER-SD, Brano Ondrus. He says the ruling coalition are going to deprive ordinary people in Slovakia of millions of euros.

Ondrus, who is also the vice-chairperson of the Parliamentary social committee, said: “The Finance Ministry’s proposal to scrap tax-relief for savers in the supplementary pension system is a practical example of how Iveta Radicova’s government wants to save money at the expense of the common people”. He feels the proposal hasn’t been thought out properly and that Slovaks will not have higher pensions, but higher taxes.

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