February 7, 2018 / 3:04 PM / 13 days ago

Slovenia should cut taxes, red tape, Chamber CEO says

LJUBLJANA, Feb 7 (Reuters) - Slovenia should reduce taxes on labour and cut red tape to encourage faster development and long-term economic growth, the general director of the Chamber of Commerce and Industry said on Wednesday.

Sonja Smuc said the next government, which will be established after parliamentary elections expected in June, will also have to act on pension reform to cope with a rapidly ageing population.

“The retirement age will have to be prolonged ... while jobs will have to be re-organised in a way that older people will want to keep working,” Smuc told Reuters in an interview. Slovenians can now retire at the age of 60.

She also said Slovenia’s largest bank, Nova Ljubljanska Banka, must be partly privatised, as agreed with the European Commission in 2013 in exchange for state aid. And the government should not keep a majority stake, she said, because no government can resist politically influencing its bank.

Slovenia plans to sell 75 percent of the bank and keep a stake of 25 percent to have a say in key business decisions.

HIGH TAXATION

Smuc said that people with the highest wages pay taxes on wages and personal income that together reach a rate as high as 70 percent, which is not acceptable.

”It is hard to attract professionals from abroad after they calculate what would be the difference between their gross and net income,“ she said. ”On top of that, young Slovenians are leaving the country, also due to high taxes.

She rejected public-sector demands for a large increase in wages, saying most public services have not improved enough in recent years to warrant the increases.

Waiting on an exam at a doctor-specialist has lengthened and the average waiting time for a construction permit is about 270 days, 43 days more than 10 years ago.

Next week, police, nurses and teachers are planning separate strikes to demand higher wages. In January, about 30,000 other public servants held a one-day strike for wage increases .

Smuc said the public-sector wage bill should not increase by more than 4.4 percent this year, as the government’s budget plan calls for.

The government expects the economy to expand 3.9 percent this year, boosted by higher exports and investments. The European Commission earlier on Wednesday raised its forecast for growth to 4.2 percent from an earlier 4 percent.

Reporting By Marja Novak, editing by Larry King

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