1 / 22

Business Environment in Slovakia and Potential Learnings

Business Environment in Slovakia and Potential Learnings. Slovakia - Basic Facts. Population: 5,4 MM Area: 49 035 km sq. Unemployment: 1 2,9 % GDP growth: 5,5 %. Slovak Top Points. Referendum for EU entry – the highest percentage voting YES (92.5%)

bliss
Download Presentation

Business Environment in Slovakia and Potential Learnings

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Business Environment in Slovakia and Potential Learnings Kyiv, May 16, 2005

  2. Slovakia - Basic Facts Population: 5,4 MM Area: 49 035 km sq. Unemployment: 12,9% GDP growth: 5,5% Kyiv, May 16, 2005

  3. Slovak Top Points • Referendum for EU entry – the highest percentage voting YES (92.5%) • The fastest growing economy in Central Europe (4% CAGR 1997-2004) • The largest country entering to EU and NATO in 2004 • First EU country introducing one VAT rate and one Flat Corporate and Personal Income Tax (19%) Kyiv, May 16, 2005

  4. Development of IBE Index of Business Environment Access to Credit IBE Index Law Enforcement Kyiv, May 16, 2005

  5. Slovakia – the best items • 3. – FDI bringing new technology • 4. – Conditions for employment of foreign labor • 8. – Tax impact on doing business • 10.- Access to credit • 11. – Availability of engineers and scientists • 13. – Quality of education of math and science Kyiv, May 16, 2005

  6. Slovakia – the worst items • 96. – Regional differences • 89. – Airport infrastructure and transport • 81. – State budget deficit • 66. – Governmental support for information technologies • 66. – Cost of agricultural policy • 64. – Efficiency of judiciary system Kyiv, May 16, 2005

  7. Ukraine – the best items • 7. – Local Availability of Process Machinery • 8. – Hiring and Firing Practices • 11. – Local Availability of Components and Parts • 18. – Real Effective Exchange Rate • 19.- Pay and Productivity • 19. – Railroad Infrastructure Development Kyiv, May 16, 2005

  8. Ukraine – the worst items • 103. – Pervasiveness of money lundering through banks • 102. – Cost of agricultural policy • 101.- Efficiency of the Tax System • 99. – Subsidies for Energy or Materials • 95. – Judicial Independence • 93. – Foreign Ownership Restrictions Kyiv, May 16, 2005

  9. Tax Strategy • Very often changes of legislation • Income Tax Law -31x, Administration of Taxes and Fees -20x • Too big contents – Income Tax Law 4x bigger in 10 years • Ad hoc reaction • Non-univocal explanation of law and potential conflicts with Tax Offices • Need for new complex Tax Strategy • Taxes should secure funding of public service • Taxes should have as neutral as possible impact for doing business Kyiv, May 16, 2005

  10. Tax System • Direct Tax • Profit • Flat Corporate and Personal Income Tax • Equity • Real Estate Tax • Motor Vehicles Tax • Indirect Tax • General Consumption • Value Added Tax • Specific Consumption • Consumer Alcohol Tax • Consumer Beer Tax • Consumer Wine Tax • Consumer Tobacco and Tobacco Products Tax • Consumer Mineral Oil Tax Kyiv, May 16, 2005

  11. Results of Slovak Tax Reform • Cancelled • Inheritance Tax • Tax on Sale of Real Estate • Tax on Dividends • Flat Tax Introduction • Savings of only one VAT rate • Simplicity of Tax System • Transparency for all Stakeholders • Stimulation for higher Earnings Kyiv, May 16, 2005

  12. SWOT Strengths GDP Growth Tax Reform Labour Law New Business Start Up Weaknesses Law Enforcement Regional Differences Environment Protection Policy Opportunities Informatization Social Cost reduction EMU Membership Threats Harmonization Trends in EU CAP Kyiv, May 16, 2005

  13. Business Environment Priorities 1/ Easy Market Access 2/ Flexible Labor Market 3/ Simple Tax and Administrative Rules Kyiv, May 16, 2005

  14. 1/ Easy Market Access • Entry Cost to Market • Denmark 0 fee • In most EU countries high fee (1500-6000 EUR) • Entry Time to Market • Denmark 3 days, UK 5 days • 2-3 months in some new EU countries • Simplification of Administration for Start of new business Kyiv, May 16, 2005

  15. 2/ Flexible Labor Market • Need for Improvement of Labor Mobility • More flexible Labor Code • Working Time • Variable Job Contracts • Temporary Workers Use • Comparison with US • 25 – 54 OK • <25 far behind • >54 far behind Kyiv, May 16, 2005

  16. 3/ Simple Tax and Administrative Rules • Income tax level is lower than in US (average 13.3% vs. 15.7%) • Social cost is doubled than in US (29.9% vs.14.2%) • Social cost reform is necessary in most European countries • Simple and Stable Rules • Flat Tax Kyiv, May 16, 2005

  17. Support for European Enlargement • European Integration will lead to the Efficiency Improvement • Economic Standardization • Cultural Localization • Regular communication between Business and Politics is inevitable Kyiv, May 16, 2005

  18. Priorities of Lisbon Strategy in Slovakia • Information Society • Innovation, Science and Research • Investments into HR and Education • Business Environment Kyiv, May 16, 2005

  19. SME‘s as the Core of the Economy • There is more than20 million SME’s in EU • SME’s create in EU66%employment in a private sector • SME’sreact fasterfor market needs as big companies • Development of SME’s will supportfaster and more stable GDP growth Kyiv, May 16, 2005

  20. The FDI Impact • Direct Investments and Employment • Indirect Employment (multiplier effect) • Improvement of Productivity • Education • Ethical Standards Kyiv, May 16, 2005

  21. Learnings • Simple and Transparent Legislation • Easy Market Access • Flexible Labor Market • Simple Tax and Administrative Rules • Efficient Institutional Framework • Law Enforcement and Judiciary Efficiency • Ethical Standards • Regular Communication between Business and Politics Kyiv, May 16, 2005

  22. Development of Business Environment will contribute to the Improvement of Quality of Lives in Ukraine Kyiv, May 16, 2005

More Related