Republic of Slovenia: Selected Issues

IMF Staff Country Reports, February 19, 2019

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Republic of Slovenia: Selected Issues

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Bibliographic details

• Published: February 19, 2019
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781484399651.002

Executive summary and central finding

• The paper argues that revenue-neutral tax rebalancing would help Slovenia address long-term fiscal and growth challenges.
• The present tax-benefit system is supportive of distributional fairness in Slovenia; however, tax reform can help bring stronger employment and productivity growth and enhanced resilience to the challenges of population ageing.
• Model simulations indicate that a revenue-neutral tax rebalancing has positive fiscal and growth benefits over time and can permanently and significantly increase potential output in Slovenia.
• The paper lays out the case for tax reform in view of long-run fiscal and growth challenges, reviews the current tax system and its weaknesses in comparison with international best practices, sets out tax reform options, and uses a model simulation to illustrate the medium- to long-term fiscal and growth impact.

Key findings from analysis and simulations

• Revenue-neutral tax rebalancing delivers positive fiscal and growth outcomes over time.
• Such rebalancing can permanently and significantly increase potential output in Slovenia.
• The existing tax-benefit system supports distributional fairness but exhibits weaknesses relative to international best practices that tax reform could address.
• Model simulations are used to show medium- to long-term fiscal and growth impacts of proposed tax reforms.

Policy implications and reform options

• Consider revenue-neutral rebalancing across tax instruments to support employment, productivity, and resilience to population ageing.
• Review and align current tax system features with international best practices to address identified weaknesses.
• Use model-based scenario analysis to assess medium- to long-term fiscal and growth consequences of specific tax policy changes.

Subjects and keywords (as listed)

• Consumption taxes
• Income tax systems
• Personal income tax
• Revenue administration
• Taxes
• Value-added tax
• Keywords: capital gain, Consumption taxes, CR, Global, Income tax systems, ISCR, Personal income tax, PIT rate structure, property tax, property tax regime, rate, revenue, tax, tax-to-GDP ratio, Value-added tax, VAT, VAT rate

Content in this bundle

• Republic of Slovenia: Selected Issues; IMF Country Report No. 19/59; January 29, 2019
  • Republic of Slovenia: Selected Issues; IMF Country Report No. 19/59; January 29, 2019 (Markdown version)
  • Republic of Slovenia: Selected Issues; IMF Country Report No. 19/59; January 29, 2019 (PDF)