The Commission shall adopt implementing acts in accordance with Article 21 of Regulation (EU) No 1303/2013.

The possibility of increasing the value-added tax (VAT) in Slovenia has sparked significant discussion among policymakers, economists, and the public. According to recent statements made by Finance Minister Andrej Šircelj during a television interview, raising VAT could be one of several potential measures aimed at addressing the country’s growing budget deficit. However, Šircelj emphasized that this does not mean the government is immediately planning to implement such a measure. The current budget shortfall, which is projected to exceed three percent of GDP this year, has placed pressure on the government to find solutions to stabilize public finances.

Šircelj noted that the government's priority is first to examine and reduce expenditure trends before considering any increases in taxes. He pointed out that certain areas of public spending have grown significantly over the past period, particularly in sectors such as public procurement of medical equipment and infrastructure projects like railway station construction. These areas, he said, represent opportunities for cost savings without necessarily affecting essential services. Additionally, he mentioned that salary expenses within the public sector had been largely unregulated under the previous administration, suggesting that these could also be reviewed as part of broader fiscal reforms.

The idea of raising VAT comes amid criticism from opposition parties who argue that the new coalition government had promised lower taxes and reduced public spending during the election campaign. Šircelj acknowledged that the coalition agreement includes commitments to maintain stable and predictable financial policies, including reductions in income tax, lower corporate tax rates, and increased general exemptions. While he did not rule out VAT hikes entirely, he stressed that they would not be implemented unless absolutely necessary and only after exploring other options.

Economists have raised concerns about the potential consequences of increasing VAT. Marko Jaklič warned that such a move could lead to unintended economic effects, including inflationary pressures on consumer goods and possible panic in financial markets. He also highlighted the contradiction between proposing higher taxes on basic necessities while simultaneously promising tax cuts elsewhere. This inconsistency, according to Jaklič, could send mixed signals to both domestic and international investors.

Finance Minister Šircelj himself expressed awareness of the risks associated with raising VAT. He acknowledged that any increase in taxation might result in higher prices for everyday items, potentially exacerbating inflation rather than alleviating the budget deficit. Despite this, he maintained that the government must consider all available tools to address the shortfall, including VAT adjustments, though he emphasized that such decisions would depend on detailed assessments of the actual financial situation.

The government faces a deadline set by the European Commission to bring the budget deficit below three percent of GDP, a target currently estimated at around four billion euros. To meet this requirement, the government will need to identify alternative funding sources beyond potential tax increases. Šircelj indicated that the focus will initially remain on reducing expenditures, but he left the door open for future discussions on tax policy changes, should the need arise.

As the government works toward balancing its budget, the debate over whether to raise VAT continues to unfold. While Šircelj insists that no immediate action is planned, the mere suggestion of such a measure has already ignited political and economic discourse. With the upcoming autumn deadline approaching, the government will likely face mounting pressure to present concrete plans for resolving the budget deficit, ensuring compliance with EU regulations while maintaining public support for its fiscal policies.