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Slovenia Business Week no. 30: Government Reform Committee to Tackle Taxes First

The first project of the newly formed government committee for reforms will be to simplify the tax code

The first project of the newly formed government committee for reforms will be to simplify the tax code, Joze P. Damijan, the economist who was put in charge of the reform committee, told the daily Dnevnik on Saturday. 23 July.

According to him, the time frame for reforms is clear: most of them must be implemented on 1 January 2007, so legislation must be drawn up by the first half of next year to be signed into law by the end of 2006.

In addition to taxes, Damijan wants the reform package to include social transfers, health, pension and higher education. These too would be implemented in 2007.

Moreover, he would like to set a few major projects. "I believe it would be good if about 80% of the EUR 3.5bn in European funds that we are to get until 2013 is earmarked for five to eight major projects."

Damijan believes investments should be made in the gaming industry, while a major car maker should be brought to Maribor or Prekmurje in the east of the country.

The third key project would be support for technologically intensive companies through a technology agency and support for spin-off incubators at universities.

The reform committee will also draft privatisation programmes for companies such as the national telco Telekom Slovenije, insurer Zavarovalnica Triglav and the banks NLB and NKBM. Some energy firms must also be privatised, he said.

While some, such as NKBM, need a strong strategic partner, others only need portfolio investors or fresh capital. Zavarovalnica Triglav, for example, can survive without a strategic partner, he argued.

Damijan is also adamant that the state-run Restitution Fund (SOD) and Pension Fund Management (KAD) should become portfolio investors without the ability to install their own people to supervisory boards.

"The state has to decide which investments it considers as strategic and stay there as a transparent owner, and withdraw from all others," according to him.

Asked whether in September he will be named minister of a newly established ministry of development, Damijan said that talks are under way, but nothing is certain yet.

"Although I do not wish to become a minister, I know that strategies cannot be carried out if there is no minister to explicitly coordinate implementation."

Yet "if they don't let us work, I will resign," said Damijan. "I have no problem with that. I don't want to be a minister; I just want to carry out a project so that Slovenia remains a social yet more competitive country."

Asked to comment on the resignation of Mico Mrkaic, the chair of the government's strategic council for economic development, Damijan, who is also a member of the council, said that Mrkaic left too soon.

"I am confident that the members would be able to convince him in a joint conversation how it is worth to stay on and influence the course of reform, more so than ever before," he explained.

Source: Slovene Press Agency STA

Author: STA