February22–March6,2016

Gov’t collects
more taxes
NEWS
Repeat performance
With election day fast approaching Prime Minister
Robert Fico is trying to
brand political opponent
Igor Matovič a tax cheat.
The move recalls classic
Fico campaigns of the past.
pg 2
BY JANA LIPTÁKOVÁ
Spectator staff
Cast aside
Slovak steel workers could
be adversely affected by a
decision to designate China
a market economy. Cheap
Chinese imports prompted
the European steel industry
to take to the streets of
Brussels.
pg 4
OPINION
Shallow Smer
Thuggish tactics blocked
teachers from observing a
parliamentary debate on
conditions in schools. Tactics like this by the Smer
party are an indication of
how little they offer voters
by way of substance.
pg 5
BUSINESS FOCUS
All bark, no bite
New laws are said to target
tax dodgers, but experts see
little reason to believe they
will help crack down on the
worst offenders.
pg 6
Digital dilemma
Sure there are plenty of
deals to be found for online
shoppers, but hidden costs,
cross border sales and a lack
of clarity on taxes mean
consumers must be smart.
pg 7
CULTURE
Stepping up
Choreographer Natália
Horečná left Slovakia 22
years ago, but now she is
back with a brand new
show that blends neoclassical, jazz and folk
themes at the Slovak National Theatre.
pg 10
Trams crossed the rebuilt Old Bridge February 16, and will access Petržalka for the first time in decades.
Photo: Sme
Masseur’s big profits
tied to state scandals
DURING a week that saw nurses
protesting for higher salaries, Slovaks witnessed another possible
wasting of funds from a long line of
health care scandals the current
government is facing.
The story of Pavol Kostka’s successful business, which increased its
income for rehab services 10 fold
within two years, raises questions
about his ties with government and
Prime Minister Robert Fico.
Kostka started his career as a
masseur and founded his first company CPKSB in 2008, which was not
BY ROMAN CUPRIK
Spectator staff
very successful. This, however,
changed in 2012 when Smer won the
elections and Marcel Forai was appointed head of the state health insurer
Všeobecná
Zdravotná
Poisťovňa (VšZP). The revenues of
the company increased from roughly
€50,000 in 2010 to nearly €141,000 in
2012. They continued rising and in
2014 amounted to €1.5 million.
Kostka’s profits were also increasing, from nearly €8,700 in 2012
to €617,000 in 2014 and in Forai’s era
Kostka expanded his network of
health-care facilities going under
the name Kostka Clinic to six, the
Sme daily reported.
Moreover, rehab doctors reproach their colleague Kostka for the
low quality of treatments offered at
his facility, by people who are not
fully qualified to provide the services.
Spectator staff
DESPITE strong opinions that preceded a recent summit of the central
European countries, the Visegrad
Group (V4) went to Brussels united
and ready to embrace a common
European solution to the migration
crisis – minus refugee quotas.
Prime ministers of the V4 met in
Prague on February 15, the day when
the grouping celebrated its 25th anniversary, but refugees rather than
celebrations were central to their
talks.
For Slovakia, the Czech Republic, Hungary and Poland, border protection is essential to solving the
refugee-related situation in Europe,
the prime ministers stated jointly
after the meeting. This was also
stressed by the guest countries invited to the V4 summit this time
around: Bulgaria and Macedonia.
“The swift implementation of
measures agreed at the EU level to
strengthen external border protection must remain the top priority,”
the joint statement reads.
Some have perceived the summit as an attempt to negate the solution discussed on the EU level. Luxembourg Foreign Minister Jean Asselborn was reported to have warned
the V4 countries not to become “a
club of renegades”.
By the end of the summit,
however, the V4 leaders declared
they were ready to embrace the
See MORE pg 4
Economics
are not an
election issue
BY JANA LIPTÁKOVÁ
Spectator staff
See REHAB pg 9
common European solution that the
major EU summit on February 18 was
expected to bring. They however
stressed that they would insist on
their plan B, as Slovak Prime Minister Robert Fico labelled it after the
summit, if that common European
solution failed to be implemented.
“The conclusion of the V4 summit managed to calm the situation
and the uproar that emerged because V4 countries have in the recent months earned the label of
countries that don’t always agree
with European solutions,” Tomáš
Strážay, an expert on the Visegrad
region from the non-governmental
Slovak Foreign Policy Association
(SFPA), told The Slovak Spectator.
JUST a few days before the parliamentary
elections it is clear that economy-related issues, whether domestic or international,
are not a topic of heated pre-election discussion and parties remain vague on what
they would do if they form a government.
One explanation might be that in Slovakia
voters do not put any significant stress on
the election programmes of political parties
and that campaigns as well as billboards are
primarily about faces.
“The parties are more about personalities and concrete slogans,” Martin Reguli,
analyst from the F. A. Hayek Foundation,
told The Slovak Spectator. Opposition
parties may be staying intentionally vague
to preserve the opportunity for joining a coalition with Smer.
The ruling Smer party, that is expected
to win the next parliamentary election, had
initially summed up its five priorities on
one sheet of paper and just 21 days prior to
the elections it held a programme conference to offer the public a bit more.
See V4 pg 2
Read more on pg 3
V4 takes its plan B to Brussels
BY MICHAELA TERENZANI
BETTER collection of taxes and positive
economic developments have boosted state
coffers more than the Finance Ministry
originally forecast. The latest prognosis by
the Financial Policy Institute (IFP), a think
tank at the Finance Ministry, has increased revenues from taxes and levies by
hundreds of millions of euros for the years
2015-2019.
“This prognosis is a result of good news
about the positive development of [Slovakia’s] economy from the viewpoint of the
economic growth and the labour market,”
said Finance Minister Peter Kažimír when
introducing the latest prognosis.
The state will collect €489 million or 0.6
percent of GDP more in taxes and levies for
2015 when compared to October’s estimate,
according to the tax prognosis published on
February 15. Revenues will rise €410 million in 2016, €369 million above the 2017 estimate and €444 million more in 2018.
Kažimír attributed it to higher collection of the value added tax (VAT), corporate
tax, while noting that other tax revenues
increased too.
“What is very important, out of additional revenues, this sum, €290 million or
60 percent, we ascribe to better collection
of taxes and levies,” said Kažimír.
2
NEWS
February 22 – March 6, 2016
Strike for better education endures
THOUGH the teachers at
primary and secondary
schools suspended their
strike as of February 15, several initiatives and groupings still fight for their requests.
The baton has been symbolically passed to university
lecturers.
“We’re going on strike as
of today in protest against
the way in which our colleagues are being treated,”
Juraj Halas from University
Lecturers Initiative (IVU)
said on February 15, as cited
by the TASR newswire.
Together 443 employees
of 19 universities and colleges were on strike according to February 17 data. The
majority were from Comenius University in Bratislava
(237), the SITA newswire reported.
Meanwhile, also young
Slovaks studying abroad
have supported the strike of
university teachers, sending
an open letter to Education
Minister Juraj Draxler.
The Initiative of Foreign
Students to Support Teachers
has already collected some
500 signatures, which is the
biggest initiative of foreign
students calling for change
in Slovakia, according to the
information provided to The
Slovak Spectator.
“The level of education
was one of the important
reasons for our departure
from Slovakia,” starts the
letter. “Thus we support
protesting teachers: in order
to prevent other talented
people from leaving, to motivate us to return, to avoid
the situation in which we
will have to send our children
abroad for better education.”
The all-out strike which
kicked off on January 25 was
attended by a total of 15,000
teachers from 1,000 schools.
Moreover, during those three
weeks more than 400,000
lessons were not taught, according to the strike’s organiser, the Initiative of
Slovak Teachers (ISU).
The strike has succeeded
in making the education
system an important social
and political topic, Vladimír
Crmoman of ISU told TASR.
“Despite many people
opposing the strike due to its
informality, we think that
the fact that teachers joined
the strike on a voluntary
basis was a key moment that
speaks about the urgency of
problems in the Slovak education system,” he added.
Over the course of three
weeks as many as 17 demonstrations and marches took
place across Slovakia. In addition, human chains involving around 12,000 people
were created in 17 towns and
cities. Seven concerts took
place, along with more than
15 charity events and hundreds of meetings and discussions at schools, cafés,
libraries and bookstores for
teachers, parents and concerned citizens, ISU stated.
Following the protests
and talks with state representatives, teachers’ trade
unions and other organisations active in education
signed a joint declaration on
the sector on February 17.
They plan to present it to the
political parties running in
the March 5 general election,
suggesting it as a basis for
the future government
manifesto in relation to education, TASR reported.
Fico targets Matovič as
part of campaign
Fico and his wife had a fortune
deposited in a bank account in
the tax haven Belize. The allegations came after a raid was
carried out in Matovič’s company in Trnava on August 12 by
the National Crime Agency
(NAKA). The police seized
servers after the operation was
ordered by the Special Prosecutor’s Office.
The police confirmed in
October 2015 that Fico does not
have a secret account in Belize.
BY RADKA
MINARECHOVÁ
Spectator staff
WITH the recent tax fraud allegations he made against an
opposition politician, Prime
Minister Robert Fico is again
seeking to raise suspicions
against his political rivals as a
pre-election tactic. But much
like previous cases this one is
unlikely to end up having substance, says analyst.
Fico alleges Igor Matovič,
leader of the Ordinary People
and Independent Personalities
(OĽANO), avoided a tax audit by
selling his Region Press company for the equivalent of
about €4 million to one of his
employees while keeping the
company’s money on his personal account and later withdrawing from the contract.
Fico targets Matovič
Igor Matovič stored his accountancy in a loft.
Since Fico informed about the
case on February 5, both he and
Matovič have repeatedly accused one another of lying.
Political analyst Grigorij
Mesežnikov, president of the
Institute for Public Affairs
(IVO), sees the clash as a familiar part of Fico’s campaign
Photo:TASR
Terrorism is not the main concern
THE TERRORISM threat that
the ruling Smer party uses in
its election campaign when it
comes to refugees does not
bother people that much in
association with the migration crisis.
Concerns regarding work
in regions with higher unemployment are much greater, according to qualitative
research on 93 people in 14
groups carried out by the Department of Political Science
at Comenius University in
Bratislava for the Sme daily.
Moreover, the respondents claimed that also Slovaks who work, for example,
in Germany which enabled
entry of refugees, are endangered. Also their different
mentality that was called a
‘different culture’ by several
of those polled raises uncertainty in them.
Compiled by Spectator staff
strategy.
“The whole case was prepared to discredit a political
rival,” Mesežnikov told The
Slovak Spectator. Fico probably chose Matovič as target
for previous clashes, he added.
Back in August 2015
Matovič made allegations that
In early February, Fico convened a press conference to
publicly release documents that
several experts have since said
are subject to tax secrecy laws.
Fico alleges the documents
prove that Matovič has committed tax fraud in the past.
See FRAUD pg 10
V4: ‘Cannot afford to be a renegade’
Continued from pg 1
In the days running up to the V4 summit the situation between the V4 countries and some of their European partners proved tense.
“We have received a demarche, imagine that, about how the V4 together with
Bulgaria and Macedonia dare to discuss
the protection of external borders,” Fico
said prior to the summit.
While Slovakia’s Foreign Ministry admitted they received communication
from Germany prior to the summit, they
refrained from disclosing the details. The
Czech government, however, did not perceive the German communication as a
complaint.
Slovakia’s President Andrej Kiska reacted to the tensions and, as he mentioned the history of the Visegrad Group,
recalled the “original strategic goals” of the
V4 cooperation, namely the strategic interest of the central-European countries to
be close to their western partners.
“It’s great to have our own strong
voice, but it’s even better to have strong
allies who are willing to listen to it,” Kiska
wrote in his official statement ahead of
the summit, and pointed out that it is
“useful not to confuse a pragmatic approach with political short-sightedness”.
No rebellion, just Plan B
Universities take the baton.
Photo: Sme
The V4 countries’ acknowledged the
EU solutions, including the EU-Turkey
plan and the strengthening of the border
between Greece and Turkey, as the most
important outcome of the summit, according to Strážay. He does not deem it to
be exceptional when a group of countries come up with their own proposal, as
the V4 countries did with their plan B, but
noted that “these alternatives should be
resorted to only if all the possibilities of
the European solution are exhausted”.
Dariusz Kałan, head of the Central
Europe Programme at the Polish Institute of International Affairs in Warsaw
think tank, reads the outcome as a sign V4
will not block the “mainstream solution”, which is to cooperate closely with
Turkey.
Fico about threats again
“There is a clear link between organised crime and migration crisis,” Fico said
following the summit, and mentioned
falsification of passports and diplomas
and added that “unless the Schengen borders aren’t closed, we stand no chance”.
Fico repeatedly stated that the migration
crisis threatens the security in Europe.
Other Slovak officials were more
moderate in their statements.
“One thing is clear: either we regain
control at external borders, or we will be
pushed to introduce controls at our internal borders,” Ivan Korčok, Foreign
Ministry’s state secretary, said as he arrived to the General Affairs Council in
Brussels on February 16.
Kałan, however, perceives the message of the V4 summit as “quite unclear”.
“The declaration is very soft and in
line with the European solutions for the
crisis, while during the press conference
some leaders, including Fico, were very
outspoken in their criticism of the EU
strategy,” Kałan told The Slovak Spectator.
In the end the V4 prime ministers expressed “their full support for measures
adopted at the EU level with the aim of a
more effective protection of the external
borders”, but repeated “their negative
stance” towards refugee quotas.
They called for progress in two areas:
adoption of the Council position on the
European Border and Coast Guard, and
implementation of the EU-Turkey action
plan with “credible results”.
The V4 countries however did put forward what they called the alternative
back-up plan for the Western Balkans migration route, which includes sending
Does the V4 stand united?
troops to help protect the Macedonian
border. Slovakia offers 300 police officers
In the autumn of 2015 Poland backed
to be deployed to Macedonia and Bul- off from the common V4 position and
garia as part of that plan.
supported the refugee quota system in the
council of ministers’ vote, Slovakia has
since sued the council for passing the
quotas.
“[Poland’s vote] might have surprised some, but it did not crash the cohesion and the perspective of the V4,”
Strážay told The Slovak Spectator.
Meanwhile, Poland has been through
elections which put conservatives at the
helm of the country, and their position is
now closer to that of the other V4 partners. Even though the Polish government decided not to change the quotas for
Poland, they refuse the implementation
of the plan as such, as do the other
Visegrad countries, Strážay noted.
Yet the migrant crisis remains an artificial problem for the countries of central Europe, “as none of them is either
transit or destination country”, Kałan
noted.
“Leaders are using it for domestic
consumption, and as with almost all topics of that kind they have an expiration
date,” Kałan said and noted that in Slovakia and in Hungary it is already apparent that people are more interested in the
real problems of their countries.
V4 in the EU
Slovakia and its fellow members of the
V4 cannot afford to be renegades in the EU,
analysts agree. With the implementation of the Lisbon Treaty the V4 lost its
strong position in the EU, which means
they will have to search for allies among
other members.
“And if they carry the label of
solidarity-lacking, non-consensual partners, seeking coalition partners would be
harder,” Strážay told The Slovak Spectator. As EU members, V4 countries cannot
act on their own, but everything they do
should be compatible with the solutions
that the EU comes up with at the February 18 summit, Strážay noted.
“Visegrad solutions should be
European solutions. That I think is a key
element in terms of the future of the V4,”
he said.
Radka Minarechová
contributed to this story
NEWS / BUSINESS
www.spectator.sk
February 22 – March 6, 2016
3
Economy grows, but policies lacking
BY JANA LIPTÁKOVÁ
Spectator staff
gramme conference just 21
days before the elections, a reaction to falling poll numbers,
analysts say.
itive measures improving the
Slovak business sector, in
general they evaluate the Fico
cabinet and steps it has taken
over the last four years negatively. Among the negative
measures they list revision to
the Labour Code making the
labour market less flexible, increased payroll taxes and the
failure to improve law enforcement. Among the positive features they list some reduction of red tape and mitigation of some regulations.
“A quality environment
(i.e. a position somewhere up
to the 20th ranking in the Doing Business, while in the edition for 2016 Slovakia was
29th), is still an unreachable
Atlantis for Slovak business
people,” Vlachynský told The
Slovak Spectator.
Smer’s election programme
SLOVAKIA is heading towards
the March 5 parliamentary
election amid sound macroeconomic conditions. And even
though analysts, economists
and others keep calling for the
need to increase the competitiveness of Slovakia’s economy there are few economic
issues with urgency.
The Slovak economy grew
by 3.6 percent year on year in
2015 when its growth accelerated to 4.2 percent y/y during
the final quarter of 2015. The
growth was one of the factors
behind the upgrade of the prognosis for collection of taxes
and levies for 2015-2019, increasing revenues by about
€400 million for each year. The
jobless rate continues to fall
too, and Slovakia closed 2015
with an average registered
unemployment rate of 11.5
percent – 1.29 percentage
points less than in 2014. Real
wages are rising and the Finance Ministry estimates they
will increase by 3.1 percent in
2016.
Amidst these positive economic indicators, the development of Slovakia’s small and
open economy remains highly
dependent on outside factors
and developments in the economies of its main trade partners. Economic analysts and
representatives of employers
calling for reforms to increase
competitiveness of the country point out that the Robert
Fico government has failed to
carry them out. While they
praise the consolidation of
public finances, they are critical that it has largely been
done by boosting revenues and
not cutting spending.
While the ruling Smer
party is expected to win the
next parliamentary election,
some public opinion polls indicate that it would need a coalition partner to form the
cabinet. This may be a reason
why opposition parties in their
election programmes have
been vague. Smer held a pro-
Prime Minister Robert Fico
said the party was waiting to
unveil its plans so that they
could base them on the latest
economic indicators.
“We wanted to know
where we are [before elections] and whether we can
make clear pledges that we
want to adopt,” said Fico at the
conference as cited by the
TASR newswire.
At the conference held in
Banská Bystrica on February
13, Smer extended its original
five election priorities that fit
on a single sheet of paper, into
three pages with four main
goals. They promised to increase the minimum wage,
now at €405 per month, to
€500, continue in reduction of
levies, create 100,000 jobs, reduce the unemployment rate
to below 10 percent, extend the
10 percent VAT on more basic
foods and reduce regional disparities. It also wants to increase the standards of living
of Slovaks in order it achieves
85 percent of the average of the
EU in 2020 and that the Slovak
economy becomes the best
performing among V4 countries (the Czech Republic, Poland, Hungary and Slovakia)
by 2020. Smer did not elaborate on how to achieve these
goals.
Smer voiced its plan to
create the government with
one of the standard political
parties, where it listed the opposition
ChristianDemocratic Movement (KDH)
and Most-Híd; as well as its
former coalition partner, the
Slovak National Party (SNS) as
meeting this criterion, with
newcomer Sieť a possibility
too.
Analysts do not perceive
results of Smer’s programme
conference as a real election
programme.
“Primarily I miss in this
programme focus on reforms
or changes by which it wants
to achieve these goals,” Mar-
Some view social packages as non-systemic measures.
tin Reguli, analyst from the F.
A. Hayek Foundation, told The
Slovak Spectator.
Reguli does not evaluate
the goals themselves positively, especially the increase of
the minimum wage or social
packages.
“Social packages are nonsystemic measures on the side
of expenditures without
planned reforms or recovery of
public finances,” said Reguli.
Martin Vlachynský, analyst of the Institute for Economic and Social Studies (INESS) think tank pointed out for
The Slovak Spectator that the
goals set by Smer are things
that no cabinet can secure directly.
“The cabinet cannot directly create jobs, neither can it
increase labour productivity
and thus wages,” said
Vlachynský. “But it can help
this by improving the business environment – via lower
taxes, simpler regulations,
more flexible labour code, removal of various surcharges
that make the final price of
electricity more expensive and
so on.”
In this term Vlachynský
highlights that there is not
even a mention about the
business environment in the
election programme of Smer;
“rather contrary to this, the
proclaimed increase of the
minimum wage has the potential to continue to create a
burden on employment of
long-term unemployed and
low-qualified people, especially in poor regions.”
Fiscal policy
The Fico government consolidated public finances during its term when it reduced
the general government deficit from 4.2 percent of GDP in
2012 to the forecast 2.5 percent
in 2015.
In terms of consolidating
state finances “the cabinet
chose fruits hanging low,”
Radovan Ďurana of INESS told
The Slovak Spectator. “It increased payroll taxes of the
self-employed, reduced net
incomes of those working on
temporary
employment
agreements (na dohodu), reduced the second pillar and
increased taxes for companies. This way it achieved reduction of the deficit, but at
the detriment of economic
growth, while the structure of
expenditures and extensive
waste has remained in most
places untouched. We assess
Scoring the political parties
The INESS think tank believes that Slovakia can rank among the 20 most competitive countries in the world, but that
this cannot happen without politicians.
Thereby it looked into the economic part
of election programmes of political parties
that place high in pre-election public
opinion polls and evaluated their measures. It focused especially on three fields –
(1) taxes and levies, (2) support of employment and business environment and (3)
consolidation of public finances.
It granted points to the parties, from 0
to 10, where a higher number of points
means a more beneficial programme.
While such an evaluation requires a certain extent of simplification; its intention
was especially to focus attention on concrete points of programmes of individual
parties.
INESS does not consider the items that
Smer party introduced at its programme
conference in Banská Bystrica on February 13 to be a real election programme, and
thus Smer ended without a real evaluation.
According to INESS, it is more interesting to see a large common set of measures of rightist parties. The measures in-
clude cancellation of tax licences, reduction of corporate taxes and the return to
the flat tax which are, in the opinion of INESS, good news for business. Worse news
is that only a few parties devoted attention in their programmes to the unpopular but important theme of consolidation
of public finances.
“Espousing to a balanced budget is
only an empty phrase when it is not accompanied by concrete measures in fields
of social expenditures, financing of health
care, first and second old-age pension pillars or systematic fight against waste,”
Richard Ďurana, INESS director, wrote in
the press release. “In these fields parties
faintly offered two to three measures.”
INESS criticises the parties for ignoring important European themes, except
for EU funds.
Photo: Sme
negatively the unwillingness
to reduce expenditures.”
Reguli evaluates positively
consolidation of the deficit and
a general improvement of the
development of Slovakia’s debt
while he shared the opinion
that the cabinet achieved this
via increase of revenues in the
form of scrapping of the flat
tax, increase of levies, introduction of tax licences and
others.
“It has not conducted any
reform of public expenditures
in education, health care and
social affairs,” Reguli told The
Slovak Spectator. “Contrary to
this it has brought in many
non-systemic measures that
will be difficult to cancel in the
future. Social packages are a
very good example of these
measures. In this case certain
groups of citizens are supported by money from the rest of
society.”
2016-2020 priorities
in fiscal policy
The cabinet has set fiscal
goals in a way that it relies
upon the growth of tax revenues and reduces the deficit this
way, according to INESS.
“But this is not sustainable in the long term,” said
Ďurana. “During the time of
economic slowdown and decline of tax revenues the cabinet would again get into huge
problems as it happened in
2009 and 2010. During this
time Slovakia’s debt doubled
and now represents a risk that
allows neither the minister
nor taxpayers to sleep calmly.”
When looking at election
programmes
of
political
parties in terms of whether
they address the above challenges, Ďurana said that efforts to curb corruption or
waste are found in programmes of all parties except
for Smer.
Business environment
worsened
Priorities for the business
sector
While Slovakia suffers
from overinflated bureaucracy
and a large group of the longterm low-qualified unemployed, these two fields should
be goals of the new cabinet regardless of its ideological inclination,
according
to
Vlachynský.
“Concrete measures do not
require fundamental fiscal
sacrifices, only political will
and readiness for action,” said
Vlachynský. “The new cabinet
should not resign itself either
to the difficult fight with low
law enforceability in Slovakia
because this is a cornerstone of
every healthy economy.”
In terms of individual
political parties, Vlachynský
pointed out that the current
ruling party Smer does not
bring any election programme
while several other parties
with sound chances to become
parliamentary parties offer
functional individual measures, but in many cases a sheltering scheme is missing.
Reguli believes that quality of the business environment may be increased via reduction of income and payroll
taxes and gradual reduction of
the regulatory burden. In
terms of priorities he pointed
out problems cited in various
international rankings, for
example indices of competitiveness, economic freedom
and so on that list the labour
market and lack of reforms in
governmental expenditures as
the main problems. Reguli believes that if the cabinet conducts reforms in the labour
market, cuts government
spending and business regulations, the business environment would improve.
“If the next cabinet conducted these three main reforms, it would win great support also of the business sector
and might move Slovakia into
position when foreign investments would be arriving as
well as local companies being
created,” said Reguli.
While economic analysts
To read the whole article,
and employers see some pos- please go to www.spectator.sk.
4
BUSINESS
February 22 – March 6, 2016
Slovakia maintains sound growth
THE SLOVAK economy is
gaining momentum, driven
in 2015 by domestic demand,
while EU funds stimulated
investments.
In the fourth quarter of
2015 the gross domestic
product (GDP) at constant
prices increased by 4.2 percent as compared to the same
quarter of 2014, the Slovak
Statistics Office announced
within its GDP flash estimate
on February 12. Compared
with the third quarter of
2015, when it grew 3.7 percent, the growth accelerated
by 0.5 percentage points.
Overall in 2015 the GDP
grew 3.6 percent, which is
the fastest growth rate since
2010. In 2014 Slovakia’s economy grew 2.5 percent.
“The flash estimate for
the fourth quarter of 2015 exceeded our original expectations of a more moderate
growth as well as the consensus of the market at 3.9
percent,” Katarína Muchová,
analyst at Slovenská
Sporiteľňa, wrote in her
memo.
Already earlier published
data for the fourth quarter of
2015 indicated a sound
growth dynamic of GDP.
Muchová points to the positive development of industrial
production, up 8 percent y/y,
as well as the development of
retail sales and the continued
improvement of the labour
market. On the other hand,
the development of foreign
trade remained lukewarm.
The detailed structure of
the GDP for the final quarter
of 2015 will be published only
in March, but analysts see
especially domestic demand
as the main driving force of
economic growth when the
consumption of households
was supported by the improved labour market reporting falling unemployment and growing employment. Investments grew especially under the influence
of EU funds.
Ľubomír Koršňák, analyst
with the UniCredit Bank
Czech Republic and Slovakia,
estimates that apart from EU
funds-driven sectors like
construction, also other sectors experienced a revival
during the final months of
2015.
“Especially the Slovak
automotive industry, that
became again the driving
force of Slovakia’s industry
and exports, thrived,”
Koršňák wrote in his memo.
“In spite of VW’s diesel gate
the Slovak car industry
pushed its production to new
historical peaks.”
Steelmakers march
against Chinese imports
Imports of cheap
steel would
endanger Slovak
steelmakers
BY JANA LIPTÁKOVÁ
Spectator staff
THOUSANDS of steel workers
from across the European Union marched in Brussels on February 15 to protest dumping of
cheap steel imports on the EU
market, and to call on the
European Commission to take
action. The march was attended by about 100 workers from
the steelmaker U.S. Steel Košice
(USSK) and took place the same
day as a conference on energyintensive industries hosted by
the European Commission.
“We went to Brussels to express loudly the trade issues
that have hurt European industry and its future,” USSK
President Scott Buckiso told
The Slovak Spectator. “Our
message for the European
Commission was clear: we
have to stop the flood of
products from China and other
countries unfairly sold in
Europe at dumping prices.”
European steel workers ac-
More than 5,000 steelworkers gathered in Brussels.
cuse China of using what they
see as unfair export subsidies
and selling products below
their production cost. This
poses a threat to steel industryrelated jobs within the EU, they
say.
More than 500 steel production sites across 24 EU
member states produce 170
million tonnes of steel per year
and directly employ 330,000
highly-skilled people, accord-
Photo: AP/SITA
ing to Eurofer, the European
Steel Association.
The march was held to reinforce calls to put a swift end
to dumping, to modernise
Trade Defence Instruments,
and to prevent China from obtaining Market Economy
Status prematurely, Eurofer
wrote on their website.
“We said yes to jobs and fair
trade, but also said no to Market Economy Status for China,”
said Buckiso. “We strongly oppose and expect the EC to deny
MES for China as it does not
meet market economy criteria.”
Countries around the
world, including the United
States, have launched actions
to stem the flow of what they
see as unfairly subsidised steel
products from China.
See STEEL pg 9
MORE: GDP growth boosts revenues
Continued from pg 1
The ring road should help reduce traffic jams.
Photo: Sme
Cabinet greenlights ring road project
JUST a bit more than two
weeks before the parliamentary elections to be held
on March 5 the Slovak cabinet approved a publicprivate partnership project
to build a highway D4/R7
ring road in Bratislava with a
price tag of €1.891 billion on
February 17.
The Transport Ministry
has to sign the agreement
with a consortium led by
Spanish firm Cintra Infraestructuras International by
the end of February.
The construction of the
ring road should start later
this year and be completed
by 2020.
Commerce chambers call for action
SEVEN European chambers
of commerce (Austrian,
Dutch, French, German,
Italian, Spanish and
Swedish) have determined
seven main fields of action
which should be tackled immediately after the general
elections as the business environment in Slovakia needs
reliable framework.
These fields include (1)
appropriate burden of taxes
and levies; (2) flexibility in
Labour Code; (3) practice oriented educational system; (4)
construction of highway infrastructure; (5) reduction of
bureaucracy; (6) responsibility of public authorities and
effective fight against corruption, and (7) fair and
transparent public tenders.
Compiled by Spectator staff from
press reports
“People and companies are paying
taxes more properly, and the state has
learned to collect them in a better way,”
said Kažimír.
He also pointed to an end of a decline in collection of excise taxes on mineral oils and a favourable situation of Slovak companies, whose profits are forecast
to have increased by 7.9 percent in 2015
compared with the previous year. In total,
corporate tax revenues are forecast at
€2.684 billion and revenues of income tax
paid by private individuals should amount
to €2.471 billion. Total tax and levy revenues should be €22.9 billion.
“The fact that our companies are profitable speaks about a strong economic
growth,” said Rastislav Machunka of the
Federation of Employers’ Associations
(AZZZ).
Slovakia’s economy grew 3.6 percent in
2015 with the IT, construction, automotive and service sectors thriving, according to Peter Kremský, executive director of
the Business Alliance of Slovakia.
Based on IFP data, Slovakia has managed to increase the effective VAT rate,
when it amounted to 14.6 percent during
the third quarter of 2015. This means the
best result since the low of 12.1 percent
during the third quarter of 2012. Slovakia
has a long-term problem with effectiveness in VAT collection.
Ivan Švejna of the opposition party
Most-Híd, cites growth in neighbouring
economies as the prime explanation for
the better revenues, and pointed to still
ineffective tax collection in Slovakia.
“Tax collection is better, but in comparison with what?” asked Švejna during
a discussion on the TA3 news channel.
“The effective rate is far from optimum
and we are still on the tail of the EU in
terms of effectiveness of collection, for example VAT.”
Based on a document of the European
Commission from September 2015, Slovakia reported the third biggest VAT gap in
the EU, after Romania and Lithuania in
2013, reaching 34.9 percent. The EU average was 15.2 percent. The EC defines the
VAT gap as an indicator of the effectiveness of VAT enforcement and compliance measures based on the difference
between the amount of VAT actually collected and the VAT Total Tax Liability
which is an estimated amount based on
the VAT legislation and related regulations.
Kažimír agrees that there is a huge
space for improvement.
“I publicly admit that if we got at least
to the European average in VAT evasions, we would have €800 million more
in the state coffers,” he said.
What to do with the money
The additional prognosticated revenues of €489 million in 2015 will help the
state to achieve the planned public finance deficit of 2.5 percent. Out of additional funds of €410 million in 2016, €30
million will go to health insurance companies, €130 million will go to the social
security provider Sociálna Poisťovňa, and
€110 million will flow into accounts of
municipalities. The remaining €140 million will be an income of the state that will
keep it as a reserve for supporting investment, according to Kažimír.
“The rest is on the next government [to
be created after the March 5 parliamentary election],” said Kažimír, adding that
the latest forecast gives a good background for achieving a balanced budget in
2018.
The tax prognosis is for now a preliminary forecast by economists, the
European Commission will give its assessment in May.
Contribution by JLR
The arrival of the British carmaker
Jaguar Land Rover (JLR) should have a
positive influence on tax revenues. The
carmaker plans to start construction of its
brand new plant near Nitra later this year,
with production planned for 2018.
IFP prognosticates that already in 2016
this £1 billion investment to be supported by investment stimuli of €130 million will channel €15.6 million of tax revenues into state coffers. In 2017 the revenues should increase to €45.6 million, in
2018 to €110 million and in 2019 to €220.4
million. After the carmaker launches production, the IFP forecasts the tax revenues at €265 million.
The IFP estimates that especially JLR’s
contribution to the growth of employment and wages in the economy and the
resulting consumption of employees as
well as assumed profit of the carmaker and
its subcontractors will reflect in higher tax
revenues.
“The investment of JLR is so huge that
within direct investments it can be compared with carmakers PSA Peugeot Citroen and Kia Motors Slovakia put together,” Zdenko Štefanides, analyst with VÚB
banka, told the Hospodárske Noviny
daily.
OPINION
www.spectator.sk
“I gave up my property in 2006 in favour of my children; I transferred it to
my wife’s account … That much money was making me nuts.”
OĽaNO leader Igor Matovič rejects PM Robert Fico’s allegation that he
transferred his property to protect it from distrainment.
Too much choice?
BY JAMES THOMSON
Special to the Spectator
SLOVAKIA is a perfect democracy.
No, really.
The parliamentary elections on March 5 are designed
to be perfectly proportional:
everyone’s vote goes into a
single, national ballot box.
And almost every vote would
count, were it not for the 5percent threshold that each
party must clear in order to
win representation.
Unfortunately for most
parties, that 5 percent is more
of an aspiration than a
threshold: all those now in
parliament, bar the governing
Smer party, have dipped dangerously close to (or well below) it in polling over the last
year or two, and most of the 23
parties running in this election have never got anywhere
near it.
Looking back at elections
past, some clear trends
emerge.
One is that the average
Slovak party survives about as
long as a mayfly. Of the 26 that
ran in 2012, only 11 reappear (in
one form or another) on this
year’s ballot.
The most significant expiry since 2012 is the Movement for a Democratic Slovakia (HZDS), which dominated
Slovak politics throughout the
1990s, and was part of the government until just six years
ago. Few will mourn its
passing.
Another lesson is that
comebacks are rare indeed. The
only party in modern times to
get back into parliament after
dropping out is the Slovak National Party (SNS), which returned in 2006 after a four-year
absence. It looks set to do so
again at this election – which
would be a remarkable feat.
As well as the mayflies,
there are one or two hardy
perennials. The unreconstructed Communist Party of
Slovakia (KSS) will gamely
contest this election, as it has
all the others – likely with
similar results. For a party that
once proclaimed ‘Česť práci!’
(Honour work!), a striking
number of its candidates are
retired.
Most parties are all welleducated. Smer’s candidates
(average age: 50) boast enough
doctorates between them to
staff a hospital, while the upstart #Sieť party (yes, that
hash sign really is part of its
name – supposedly to show
that it’s down with the kids)
has a rather younger profile
(average age: 39): at least one of
its candidates (I should know:
I teach him) is still studying for
his first degree.
True to hallowed tradition, few of the parties are
troubling voters with any-
thing so vulgar as a coherent
policy platform. Smer promises to ‘protect Slovakia’ –
though from what is unspecified (presumably, ethnic
pollutants such as yours truly).
Even that is something of an
improvement on its noncommittal, albeit electionwinning, 2012 assertion that
‘people deserve guarantees’ (of
what, and from whom, were
similarly undefined).
Still not sure who to vote
for? Fortunately, help is at
hand. Professor Kevin DeeganKrause of Wayne State University, the doyen of Slovak
electoral analysts, has developed the simple (and lighthearted) guide below to assist
undecided voters.
And one last tip: if you, like
almost 0.1 percent of the electorate, somehow find yourself
running for election, it might
be an idea to actually turn up.
In 2012, Marian Papp, a candidate for the Party of the
Democratic
Left
(SDĽ),
achieved the unique distinction of winning zero preferences – meaning that he did
not even vote for himself.
With sincere thanks to Kevin
Deegan-Krause for his valuable
insights, and the diagram reproduced here. The opinions above are
those of the author’s.
February 22 – March 6, 2016
On the balcony
A PARODY of democracy is not
a rare occurrence in the plenum of the Slovak parliament.
Recently, however, one of the
genre’s most exquisite pieces
was staged for an audience
other than politicians. There
was even romance to the
scene too, as it took place on a
balcony and the protagonists
showed a fervent devotion to
their cause.
Those protagonists were
several elderly men and women as well as others with an
apparent preference for the
ruling Smer party, who filled
the seats of the balcony and
prevented protesting teachers and nurses from attending the extraordinary parliamentary session convened on
February 11 to discuss the ailing health care and education
sectors in the light of the recent protests. At the start of
the parliamentary debate
(which eventually lasted until the small hours of the next
morning but produced no
substantial result), there was
much more passion on the
balcony than among MPs. The
pensioners ripped down the
banners rolled out by the few
lucky teachers who made it to
the balcony, ugly words,
combined with twisted nostalgia for the pre-1989 times.
Instead of standing up in
the parliament and addressing the protesting teachers,
Fico sent other soldiers to
fight his fight. Young men
who covered their faces when
the cameras of nosy reporters
approached, and most of all,
the elderly ladies, burning
with rightful anger, who
looked ready to defend their
political hero no matter what.
The campaign has not
reached its peak yet, and the
final get-out-the-vote efforts
BY MICHAELA
TERENZANI
Spectator staff
are yet to come. But the past
two weeks have shown that
Smer is getting nervous and it
has begun mobilising its
forces.
The
prime
minister
brought up a fraud allegation
against the leader of the opposition OĽaNO, and has repeatedly tried to remind the
people of the refugee agenda,
even suggesting he is being
scorned by Germany for his
Parliamentary balcony on February 11.
The parliamentary elections will take place in Slovakia on Saturday, March 5, 2016.
The first unofficial results are expected shortly after the polling stations close at 22:00.
The Slovak Spectator will cover election night and the ensuing developments online
at www.spectator.sk.
The Slovak Spectator team
5
anti-refugee opinions.
Just three weeks before
the election, the ruling party
suddenly convened a conference to approve its election
programme. We will never
know whether the conference would have taken place
even if Smer’s preferences
stayed where they were a few
months ago – that is, closer to
40 than to 30 percent. Perhaps
Smer would be satisfied with
its five general priorities, social packages, and tales about
good sovereigns who protect
their subjects from the evil
that lurks beyond the border.
That thought is even more
disturbing
than
the
phantoms of Mečiar’s ‘babky
demokratky’ on the parliamentary
balcony.
The
thought that the strongest
party in the country, absolute
favourite to win the election
victory and the most likely to
decide the next government,
does not even find it important to formulate a concrete
programme in advance and
present it to voters.
Then again, why would
they? Their voters seem to be
satisfied by emotion, with the
awareness that there is
someone to deliver them from
evil, with a lousy joke jovially
uttered to a crowd of thousands at a women’s day celebration, with an arrogant
smile that dismisses a report
on the state’s human rights
record, with a 10 euro cheque
from the Economy Ministry.
But are they?
Photo: Sme
6
February 22 – March 6, 2016
Changes are meant to
target tax dodgers
Institutions in the tax field
in Slovakia
-Finance Ministry, www.finance.gov.sk
Finance Minister: Peter Kažimír
-Financial Administration of the Slovak Republic
www.financnasprava.sk
-Slovak Chamber of Tax Advisors, www.skdp.sk
Lawyers critical of
rules that kicked
in at turn of year
-Slovak Association of Finance and Treasury
www.asocfin.sk
BY PETER ADAMOVSKÝ
Special to the Spectator
PROTESTS from entrepreneurs and experts against the
low fixed penalties for tax defaulters enticed the government to amend the Act on Tax
Administration, but lawyers
are critical of the changes.
“It is not a systematic
amendment that fundamentally changes the behaviour
and motivation of tax
dodgers,” Andrej Leontiev,
partner with the law firm
TaylorWessing, told The Slovak Spectator, “who profit from
delinquency thanks to the rare
inspections and very cheap
solutions in the case of discovery.”
The amendment also
factors in the length of time a
payment is overdue, setting
different rates and penalties.
The basic tariff remains 10
percent of the back duty for
each day late. In case the taxpayer submits an additional
tax return before announcement of the initiation of a tax
audit, the penalty will be
Slovaks reluctant to use e-tax returns
Combating tax evasion has already brought millions of euros into state coffers.
lower, at 3 percent, according
to the Finance Ministry.
A new option is to submit
the additional tax return
within 15 days from the audit
initiation which means a 7
percent penalty of the back
duty. The maximum sanction
equals to the amount of the
back duty imposed, Finance
Ministry spokeswoman Alexandra Gogová told The Slovak
Spectator.
Another provision only
penalises a violator for their
worst transgression even in
cases overlapping deliquencies by the same person.
“It shall apply in the case
of imposition of sanctions for
administrative delinquencies
Photo: Sme
provided for by the tax law as revenue the new law might
well as by the specific Code and generate.
accounting
regulations,”
“It is not possible to asGogová said.
sume the back duty either after
the audit or on the basis of adConditions given
ditional tax returns,” Gogová
by legislation
said.
However,
Leontiev
The previous law distin- stressed that amendment can
guished between tax inspect- create more space to ease penors or debtors revealing tax ar- alties on willful defaulters.
rears, however, only one tar“So far, the entity risked
iff of 5 percent was set up if the maximum penalty when they
debtor reported the delay stated a lower tax liability,”
himself. The rules generated Leontiev said, “but after the
penalties of €1.57 million in amendment it can anticipate
the 3,740 decisions in 2014, ac- the audit and thus submit the
cording to Financial Director- tax return and pay the lower
ate data.
penalty rate.”
The Finance Ministry declined to estimate how much
See CHANGE pg 8
Tax system grows more complicated
Revisions seem good,
but also raise new issues
BY RADKA MINARECHOVÁ
Spectator staff
CHANGES to depreciation and new rules
introduced to protect construction firms
belong among recently adopted revisions
most cited by tax experts. Though the Finance Ministry praises them and points out
the advantages, analysts warn of the impacts they will have on businesses, especially regarding red tape.
Though Slovakia used to have simple
and clearly structured tax laws, this is not
true anymore, said Wilfried Serles, tax advisor and partner at Grant Thornton Slovensko. According to him, as a result of the
revisions to tax laws adopted in October
2014 and September 2015, entrepreneurs
have to follow more than 28 changes when
preparing their tax return.
“Unfortunately, Slovakia assumes the
complexity of tax changes of Austria and
Germany which is constantly criticised by
top experts in these countries,” Serles said,
as quoted in the press release.
Depreciation still questioned
Tax experts agree that one of the
changes which significantly impacts entrepreneurs are changes to depreciation
adopted in late 2014 via an amendment to
the income tax law. The revision increased
the number of depreciation groups from
four to six, shortened depreciation of production technologies from 12 to eight years
and prolonged depreciation of nonproductive real estate from 20 to 40 years.
As depreciation reduced the tax base and
thus the final tax paid, a longer period of
depreciation means higher taxes paid.
The revision also capped the price of
motor vehicles that business entities purchase to €48,000 for business entities with
a low tax base.
Moreover, it introduced the possibility
to choose between flat expenditures of 80
percent in case the asset is used also for
private purposes or provable expenditures
depending on the real usage of the asset for
private purpose and doing business.
The Finance Ministry expected the
change to increase cash flow into state coffers, but tax experts are not very optimistic
about it. The new rules have brought more
administrative burdens to entrepreneurs,
according to Branislav Kováč, tax partner at
VGD Slovakia.
He considers the changes to tax depreciation groups to be one of the most significant, particularly prolonged depreciation
of non-productive real estate from 20 to 40
years.
“This change concerns assets such as
administrative buildings, hotels and residential buildings and therefore it will have
an impact on the financial planning for this
kind of business in future tax periods,”
Kováč told The Slovak Spectator.
Grant Thornton Slovensko analysts also
question the cap for luxury cars, questioning its effect on small entrepreneurs with
zero or only minimal profit.
Silvia Hallová, senior manager of the
tax advisory department in Deloitte, also
points to limiting the expenses that can be
included in the tax base.
“With respect to cancelling the advantaged depreciation of assets procured via
financial leasing, the attractiveness of this
way of financing has decreased,” Hallová
told The Slovak Spectator.
See TAXES pg 9
FILING a tax return can be –
instead of a lengthy and tedious procedure – an easy action
without queuing at post offices or filling in forms by
hand. The Slovak Financial
Administration offers the option of an electronic tax return for already the third year.
While natural persons and
self-employed still prefer to
send tax returns in paper
form via post, companies
have prevailingly adopted
electronic tax returns, the
Hospodárske Noviny daily
wrote in early February. In
2013, a mere 15 percent of entrepreneurs filed their tax returns electronically, a year
later the number increased to
more than 63 percent. The
reason is simple: VAT payers
are obliged to file a tax return
in e-form. Logically, these include more legal entities
which usually are VAT payers,
vice-president of the Chamber
of Tax Advisors, Alica Orda
Oravcová, said.
Natural entities do not
seem to have much interest in
electronic tax returns: last
year, only 9 percent filed
them. However, in 2014 these
were less than 2 percent. In
this aspect, Slovakia lags far
behind Estonia, in which
more than 90 percent of citizens fill in the tax return
electronically.
The guaranteed electronic
signature may be behind this
reluctance; as apart from
downloading a form from the
eDane website, this signature
has to be arranged for, and it
can become something of a
nuisance.
Despite some obstacles,
both tax advisors and entrepreneurs welcome the electronisation of tax returns.
They are bothered also by the
frequent failures and blackouts of the system, though.
Compiled by Spectator staff
A lot of Slovaks still fill in tax returns in print form. Photo: Sme
BUSINESS FOCUS
www.spectator.sk
Digital economy
presents new challenges
multinationals, when implemented they could affect the
whole business environment.
BY ERIK RÉDLI
Special to the Spectator
Hidden costs
THE INTERNET has improved
the availability of goods and
services from all around the
world and people can get almost any item with just a few
clicks. But these changes are
also presenting new challenges for shoppers, who can
unwittingly end up paying
more if they don’t pay attention.
“Despite the effort to find
the cheapest option, the goods
can increase in price unexpectedly due to the value added tax
(VAT), custom duties or the
costs of additional service,”
said Jozef Dvorský, executive
director of the Slovak Association for Online Trade (SAEC).
“Different legislations on
VAT put into disadvantage
traders from other [EU member
] countries, who have to pay the
VAT regardless of the value,”
Finance Ministry spokeswoman Alexandra Gogová said,
adding that purchases of goods
of small values up to €22 from
third countries are exempt
Online shopping can sometimes be tricky.
from payment of VAT in Slovakia.
Daniela Vojtková, tax
manager at PwC Slovensko
adds that all goods of value over
€22 are subject to VAT and you
might end up paying even the
custom duty if the value exceeds €150.
If a customer orders small
items from abroad of overall
value below €22, they can be
shipped for free because they
can be easily fit in containers
with other goods. Shipping
Photo: Sme
costs change with a larger
volume. Moreover, many entrepreneurs experience problems when complaining about
damaged goods because of the
different market practices
between Europe and other
parts of the world.
Cultural differences aren’t
the only hurdle. In October
2015 the OECD presented regulations designed to prevent tax
evasion and registering businesses in tax havens. Although
they are aimed against the big
“The biggest problem for
the ordinary people in online
shopping are the hidden costs,”
said Dvorský, adding that the
seemingly cheap goods might
increase in cost when VAT,
custom duty and sometimes
even inevitable service are
counted in. If an item gets
damaged, there may be costs
for returning it.
When ordering goods from
abroad, the customers should
check the country from where
the goods are shipped and the
country where the seller is registered. Several people had
negative experiences paying
additional VAT on goods transported from China and other
countries.
Dvorský confirmed that
the ownership and where the
shop is registered is the most
important information.
“For example, if a customer
from Slovakia purchases goods
from a shop abroad but its
owner is registered in Slovakia,
they actually are not shopping
abroad,” he explained. “In such
cases Slovak legislation applies
if the owner did not specify explicitly a different one in the
shop’s terms and conditions.”
A more complicated situation occurs when the Slovak
owner registers premises
abroad.
If the revenue of the seller
exceeds a certain sum or they
buy goods from abroad, they
have to register as VAT subjects. These sums vary
amongst countries, which
opens space for manipulation
and deception.
Another danger lies in the
transparency of the seller. If
the shopper is caught buying
fake products, they may need
to pay a fine.
Therefore experts recommend checking the reliability
of the seller and their references. Also, consumers should
be careful with disclosing their
personal data and banking details.
Experienced shoppers are
able to choose wisely in order to
make their purchase really cost
effective, Dvorský said. Experts recommend to look for
APEK, SAOP or Heureka logo on
the webpage, which is a guarantee of quality.
The situation for sellers is
more complicated than that of
ordinary customers. Countries
of the European Union,
European Economic Area and
Turkey can freely import and
export goods amongst one another. However, the seller is
subject to VAT when selling
goods abroad if the receiver is
not a registered VAT subject.
See DIGI pg 9
February 22 – March 6, 2016
7
Property tax influenced by elections
THE YEAR of 2016 has not
brought any significant increase in real estate tax, or
property tax, in Slovakia even
though its rates traditionally
change upwards one year
after the municipal elections.
This time it has not happened
while the reason for this may
be the nearing general election, in which some mayors
may run as MPs; or, perhaps,
other tax revenues are developing well.
Property tax rates increased for 2016 only by 1.42
percent on average, according
to a survey by the Business
Alliance of Slovakia (PAS),
when this year tax rates increased the most in eastern
Slovakia – in Sobrance they
soared by 81 percent, in
Levoča 23 percent, and in Zlaté
Moravce 15 percent. Several
economically strong regions
markedly increased taxes, at
least for business spaces.
Towns in the northernSlovak region of Orava,
Tvrdošín and Námestovo,
where property taxes rose
most last year, continued this
trend also in 2016, the
Hospodárske Noviny economic daily wrote. In
Tvrdošín, an additional 13
percent were added to last
year’s almost 19 percent; in
Námestovo 4 percent to previous 7 percent from 2015.
Despite this, their taxes belong among the lowest in the
country: in Tvrdošín, locals
and companies pay only one
half of the nation-wide average, while in Námestovo it is
three quarters.
In 50 district capitals the
rates did not change at all; and
five such towns even cut
these rates slightly.
Bratislava’s Old Town is
still first in the level of property taxes, having almost
double the country average.
Surprisingly, it is followed by
Senica where there is the
highest tax of arable land;
slightly lower taxes can be
found in other boroughs of the
capital, as well as in Košice,
Malacky, Piešťany, or Banská
Bystrica.
Towns and cities which
have recently built industrial
parks or lie in economically
strong regions were able to
utilise the economic high tide
to increase taxes, PAS executive director Peter Kremský
said, adding that this was logical, as new industry and
services bring also higher requirements for transport, infrastructure or servicing
activities which are often
rendered by municipalities.
The property tax rate depends on the locality.
Photo: Sme
Joining forces to combat tax evasion
COUNTRIES have joined
forces in fighting against tax
evasion. Slovakia, together
with 31 other countries,
signed a multi-lateral agreement in late January, intensifying the mutual cooperation in discovering tax
evasion.
By signing the agreement, the country has made
another step towards making
this fight more effective, the
Slovak Finance Ministry informed the TASR newswire.
The country thus also acknowledged the implementation of BEPS (Base Erosion
and Profit Shifting), the
project focused on preventing
erosion of the tax base and
shifting of profits abroad.
“I consider this step another one in the fight against
tax evasion,” Finance Minister Peter Kažimír said.
“Within international collaboration, a swift exchange
of information is inevitable,
which contributes to discovering the evasions.”
Signing of the agreement
should lead to deepening of
the transparency of multinational companies. Automatic
exchange of reports countryby-country will enable tax
administrators to get information on selected tax indices of multinational companies, including their
profits, or tax paid in individual countries. Thus, tax
administrators will receive
further information that will
help them find out whether
these companies do, or do
not, artificially reduce the tax
base by moving profits to
other countries.
Compiled by Spectator staff
8
February 22 – March 6, 2016
BUSINESS FOCUS
CHANGE: New tax rules address mistakes, not fraud
Continued from pg 6
Leontiev called this another anomaly of the current
Slovak legal order.
“It provides fraudsters
who have committed a criminal offence of non-payment of
taxes the possibility to avoid
the criminal sanction, for example imprisonment, if they
pay the due tax, and also the
fine, by the end of the investigation,” said Leontiev. “Despite the expert’s criticism the
statute still remains in force.”
A thorn in the side
Tax dodgers with a total
due tax exceeding of €17,000,
for a natural entity, or more
than €170,000, for a legal entity are visible on a Financial
Directorate list. But the
amendment also includes
plans to make more frequent
monthly updates and include
those with arrears from €170
starting in May.
Experts consider the list as
ineffective.
“During two years the VAT
ledger statement has been in
use no big fish have been
caught,” Radovan Ďurana, an
analyst at the Institute for
Economic and Social Studies
(INESS), told The Slovak Spectator, “On the contrary, there
is a desire to identify defaulters with the minimum arrears
as a result of disputes about the
due date and the contents of
the invoice or a plain typing
error in accounting.”
Ďurana pointed to services
verifying the solvency of companies that formerly existed
on the market. There is no
forms of scams within the VAT
ledger statement,” Gogová
Around
50
measures said, “such as the transition
against tax evasion have been from excess deductions to tax
introduced into practice optimisation.”
within the action plan framework since 2012. The Finance
International context
Ministry considers plan as
successful.
Tax evasion is also dealt
“The fight against tax eva- with at the international level.
sion in the period 2013 to 2015 The Organisation for Econombrought into the [state] budget ic Co-operation and Developby more than €2 billion as if we ment (OECD) approved the
stayed at the level of efficiency Base Erosion and Profit Shiftfrom the 2012,” Gogová said.
ing (BEPS) project in October
The ministry together 2015 with the recommendawith other government de- tions targeting the distortion
partments wants to continue of tax bases and transfer of
implementing its action plan. profits across borders.
Gradually there will be measThe project includes a push
ures to ensure the simplifica- to avoid double taxation treattion of the conditions for faster ies, neutralise disharmony
VAT refunds, settle the basic between
tax
systems,
stock of a limited company in a strengthen rules on the protecpreliminary bank account, a tion of tax base, adjustments in
reduction of court fees in re- transfer pricing, resolve crossgistration of entities in the border disputes as well as ofcommercial registry, VAT re- fering tax solutions to chalimbursement after the receipt lenges in the digital economy.
of payment from the buyer and
Gogová said that BEPS is a
other changes.
response to the tax strategies
“The Financial Adminis- of transnational corporations
tration has registered a rapid exploiting loopholes in the
move into more sophisticated current system.
Follow-up actions
Earlier additional tax return may save money.
reason for their replacement
by a tool with limited explanatory power which can be abused, he said.
“More efforts should be
devoted to identifying unauthorised VAT deductions,”
Ďurana said.
Leontiev agreed that
Photo: Sme
changes will affect mainly
those who make mistakes
rather than those intentionally dodging taxes.
“We suppose that more
frequent update of the list will
not markedly affect the efficiency of the tax collection,”
Leontiev said.
Kia plant near Žilina.
Photo: Courtesy of Kia Motors Slovakia
Best corporate taxpayers awarded
IN AN EFFORT to motivate
better paying of taxes, the
Slovak Financial Administration awarded the best payers
of corporate taxes in individual regions of the country,
as well as the best one nationwide, for selected tax categories.
These include companies
that paid the highest corporate tax for 2014, the SITA
newswire wrote in December
2015. Within the national Tax
Office, the company that paid
the highest corporate tax for
selected tax subjects was Kia
Motors Slovakia, for already
the third time.
“We wanted to set the criteria as fair as possible,” President of the Financial Administration (FS), František Imrecze, said. “The competition
is organised in a way that we
award taxpayers for each region individually and separately for selected tax subjects.
I deem this event important
for companies. As thus, the FS
gives them feedback that it
notices and appraises their
financial discipline. It considers them a crucial example
for other companies.”
For the taxation period of
2014, Kia paid €103.95 million
in income tax. So far, Kia Motors Slovakia has paid – only in
income tax of legal entities –
more than €240 million;
which means it paid more to
state coffers than it received
in state stimuli after it had
arrived to Slovakia.
The “Best Climber of the
Year” prize for the tax subject
which marked the biggest increase in corporate tax paid
year-on-year went to the eustream company.
In Bratislava Region, the
best payer of corporate tax is
Jadrová a vyraďovacia
spoločnosť (JAVYS); in Košice
Region Východoslovenská
energetika (VSE) energy company; in Banská Bystrica Region Slovenská Banská; in Nitra Region de Miclén company; in Prešov Region Muller
Textiles Slovakia; in Trenčín
Region Pharmaeduca; in
Trnava Region Respect Slovakia, and in Žilina Region
Dhollandia Central Europe.
Compiled by Spectator staff
BUSINESS FOCUS
www.spectator.sk
DIGI: Online tax rules may differ
Continued from pg 7
Targeting tax relocation
Apart from an increase in
online crime, the digital economy, where companies have
little or no physical presence,
broadened the options of relocating tax duties in order to
benefit from the mismatches
between tax rules in different countries.
As a response, the OECD in
cooperation with the EU laid
out the BESP (Base Erosion and
Profit Shifting) package in
October 2015. It targets tax
evasion at big corporations
and brings additional duties
that can negatively affect the
small and medium sellers
even within the EU. Under the
changes, they will have to
disclose quarterly returns,
sales revenue and VAT liabilities across Europe and keep
them on file for 10 years.
The OECD urged governments to pursue more efficient tax collection on international e-commerce. These
measures will affect the foreign businesses that sell goods
across borders, but also consumers in the target countries.
“The OECD is focusing
mainly on tax base relocation
of the multinational companies abroad,” said Dvorský.
Popularity of online shopping keeps increasing.
“Most of the Slovak online
shops have the character of
family businesses run by a
group of individuals and do
not fulfil the criteria of multinational companies.”
According to Dvorský,
even the bigger sellers such as
Alza, Hey and Mall.sk should
not be affected by the OECD
regulation.
However, Vojtková of PwC
pointed out that even private
individuals might be liable for
VAT if they are considered the
importer of the goods from a
non-EU country and the shipment exceeds a certain value.
“Import of goods is free
from VAT and customs duties
if it costs less than €22, and
free from customs duties if it
Photo: Sme
costs less than €150,” said
Vojtková. “From May 1, some
changes in the customs rules
are expected due to implementation of the new Union
Customs Code. “
All tax subjects will be affected by the BEPS package to
a certain extent, PwC wrote in
a report on the OECD action
plan.
“OECD members and G20
countries defined an Action
Plan of 15 items to address the
key taxation challenges of
today’s global economy,” explained Vojtková. The majority of the items should ensure taxation of the digital
economy activities in the territories where the consumers
are located, she said.
“Slovak
entrepreneurs
who run an e-shop and sell
goods also to other EU member states to customers that
are not VAT payers (e.g.
private customers residing
outside Slovakia) may be required to register for VAT in
the country of destination of
the goods and charge local VAT
of the respective member
state,” Vojtková continued.
It is compulsory if the
volume of internet sales exceeds a certain annual
threshold set by each member state, in most of the countries around €35,000, she added.
Electronic services like
software, films, games, music and digital database to individuals is subject to VAT in
the customer’s country of
residence, therefore the Slovak e-shops offering services
abroad should register for VAT
in the target countries too.
The process of registration is facilitated by the Mini
One-Stop-Shop (MOSS) simplification system.
“A Slovak e-shop provider
can register on a single Slovak MOSS portal, and make a
single VAT declaration to report sales and VAT collected in
each EU country. The Slovak
Tax Office will then distribute the VAT to the appropriate countries,” Vojtková said.
STEEL: Production falls at USSK
Continued from pg 4
“U.S. Steel Košice also participated in the Commission’s
antidumping investigations
into imports and we expect the
EU to take an uncompromising stance in using all of the
tools at its disposal,” said
Buckiso.
Earlier in February the EC
imposed provisional antidumping duties on cold-rolled
flat steel products from China
and Russia, but Eurofer perceives the import duties for
China as too low to stop the
flood of Chinese imports. The
EC has also opened several additional investigations into
cheap imports of steel
products from non-EU countries.
Another strong appeal for
the EC concerned EU Emission
Trading Scheme proposal post
2020 which places a huge
competitive disadvantage for
European steelmakers, as it
creates a huge cost burden
even for the most efficient
steel plants in Europe, according to Buckiso.
“On the other hand,
dumped products from China
have about 50 percent higher
environmental footprint than
products in the EU,” said
Buckiso. “Too ambitious EU
climate policy should not be a
threat for the competiveness
of the steel sector.”
The USSK is calling for a
global level playing field.
“The European Union is
one of the most open markets
in the world and we strongly
believe that European manufacturers, including USSK can
compete with anyone as long
as the playing field is level,”
Buckiso said.
Slovak steel production
affected
Amid high volumes of
products imported to Europe
during recent months, USSK
has shortened the working
week to four days while those
employees staying at home
received 60 percent of the average wage in January.
In late December, Mikuláš
Hintoš, the head of the trade
unions at USSK, compared the
ituation in USSK to the crisis in
USSK workers marching in Brussels.
2009 when the steelmaker
shortened the working week
by one day for six months.
During final months of 2015
the usage of USSK production
capacities decreased from average 90 percent during the
first nine months of 2015, to
about 70 percent, according to
the Denník N daily.
China produces 800 million tonnes of steel annually,
what is almost half of the
world’s total, with much of
that exported. On average,
Chinese steel is $50 cheaper
per tonne than what is produced in the West.
Back in 2013, the USSK
signed a memorandum with
the Slovak government, in
which it promised to remain in
Photo: Courtesy of USSK
Košice and maintain its employment levels until 2018,
while the government promised to help cut the firm’s energy and environmental bills.
In efforts to reduce costs
the steelmaker launched this
January a voluntary programme for early retirement
as of the beginning of March,
offering a severance pay of a
10-fold of the wage or €19,000
as
estimated
by
the
Hospodárske Noviny economic daily. Trade unions estimated that up to 100 workers
may opt for early retirement.
USSK employs directly and
indirectly more than 12,000
employees and is the biggest
private employer in eastern
Slovakia.
February 22 – March 6, 2016
9
TAXES: New rules may
be empty shell
the customers of a VAT payer
which are applying a special
Moreover, the lawmakers method of VAT application.
did not deal with several
The reason is that the right
questions related to transfer for the deduction of the input
of financial rent, she added.
VAT from the received invoices for goods and services
Builders’ protection
arises for these customers on
problematic
the same day as the tax liability for the supplier, i.e. only
The amendment to the
after paying to the supplier
VAT law, valid as of January
for goods or services, he ex1, 2016, introduced two main plained.
changes that concern the
“There is also an applicaconstruction sector: the extion problem in case the
tension of reverse charge to
payment is done at the end of
construction works and the
the month as the customer
principle of paying VAT only may deduct the input VAT
after receiving payment of an only in the VAT period where
invoice.
he has information from the
The first change means
supplier (who applies the
that the entrepreneurs who
special regulation) of when
order and pay for certain
he received the payment,”
construction works can use
Kováč added.
the VAT deduction from a
received invoice in their tax
Changes for the next
return. This in fact means
government
that the state will return the
VAT to them. The condition
There are, however, also
is that the entrepreneur pays some good changes the govat least €5,000 excluding
ernment has adopted.
VAT, the Hospodárske Nov“The current cabinet foiny daily reported.
cused on the fight against tax
“In case of the local supevasions which is an actual
ply of construction works,
trend not only here, but also
including the supply of a
within the EU and OECD,”
building or a part of building Hallová said.
and supply of goods linked to
In this respect she conthe installation or assiders it important that the
semblage, the VAT is due
Financial Administration
from a VAT payer who is a
has a strong position
receiver of these supplies
achieved via education,
from another Slovak VAT
practical experience or empayer,” Kováč said.
ploying experts.
However, in practice the
She also praised the fact
Slovak VAT payers must
that the parliament passed
consider each supplier indithe tax changes soon
vidually, as this is applied
enough, so there was enough
only to the construction
time to prepare for them.
works which are defined by
Grant Thornton praises
the Financial Administraalso new rules for private use
tion, he added.
of company property, like
Another measure, which passenger cars, new rules for
came into force in the begin- companies investing into
ning of 2016, allows comresearch and development,
panies not to pay VAT from
and also tax advantages acunpaid invoices. While oricompanying dual education.
ginally the changes were to
The new government
apply only to companies
formed after the March 5
with an annual turnover of
general election should focus
€75,000 and less, the final
on reducing administrative
document increases the upburdens in order to become
per limit to €100,000. The
more business friendly,
main aim of this change was Hallová and Kováč agree.
to protect smaller companies
“Further, there is still
active in the construction
place to synchronise the acsector which were harmed
counting rules with the tax
by big firms who did not pay rules as nowadays in some
their invoices.
areas the treatment of the
Though Kováč considers
same thing is different from
the idea good, he points to
the accounting and tax point
some problems. If the VAT
of view,” Kováč added, citing
payers decide to use this
the creation of provisions
special regulation of VAT, it
and allowances to receivmay have an impact also on
ables as examples.
Continued from pg 6
Following the Váhostav scandal, some laws for construction
firms changed.
Photo: Sme
NEWS
10 February 22 – March 6, 2016
REHAB: Doctors wary of colleague’s rapid growth
Continued from pg 1
Doctors filed a motion
against Kostka in the beginning of February with the
Health Care Surveillance Authority (ÚDZS).
“Slovaks don’t have illusions of their country but until this cause emerged I would
never have thought that it is
possible in Slovakia that
someone is practising charlatanism and is abovestandard rewarded for that,”
independent MP and deputy
chair of Sieť party Miroslav
Beblavý, who published the
information in the beginning
of February, told the Denník N
daily. “Thanks to his connections Kostka received multiple times more money than
he would if he did that in the
right way.”
Kostka has meanwhile refuted the claims saying that
his clinics receive more money
due to the increase of patients. Also VšZP spokesperson Petra Balážová told Sme
that the money they give to the
clinic is a result of the clinic
spreading to more locations.
“If Mr Beblavý continues to
launch these senseless and
untrue attacks, the clinic will
move to protect its reputation
in court,” reads Kostka’s statement, as quoted by the TASR
newswire. “Klinika Kostka is
requesting that the said MP
stop libelling the clinic as part
of its campaign.”
The National Criminal
Agency (NAKA) has, of its own
initiative, responded to suspicions by analysing all contracts concluded by VšZP, including those with Klinika
Kostka.
to €45.
VšZP stated that the price
hike was appropriate and has
not answered Denník N’s
question as to why CPKSB’s is
still the exclusive provider of
the service.
Complaining doctors
Becoming rich
CPKSB signed agreements
with VšZP for more than €3
million per year. This is 21
times higher than it was before 2012, according to
Beblavý.
While VšZP has twice the
number of clients as the other two private health insurers, Dôvera and Union, the
insurer pays in the millions for
CPKSB’s services, up to 10
times the amount as the other two insurers, according to
Denník N.
One of the reasons why
Kostka’s firm has such high
income from the public insurer is that it receives money
for a special treatment known
as “targeted long-term therapy”. CPKSB gets €45 for one
such treatment which takes
around three hours, the daily
wrote.
Beblavý, however, pointed out that the therapy consists of normal, standard med-
Kostka Clinic placed in Banská Bystrica.
ical services such as massages and rehabilitation which
would be up to five times
cheaper if they were done individually. He added that he
sent a person from his team to
try the treatment and discovered that the promised 3hour-long service took only 90
minutes and no doctor was
present, despite it being a preliminary check of the patient.
Pilot project
When journalists asked
Prime Minister Fico about the
price for the treatment he stated
that it was introduced by Marian Faktor of Christian Democratic Movement (KDH) in 2011
Photo: Sme
who was managing the VšZP
during Iveta Radičová’s previous government and the current government cancelled it.
However, when Faktor
managed the VšZP the treatment was just a temporary pilot project to see whether it
would decrease patients’
medication use thanks to rehabilitation. That is the reason why only Kostka was able to
receive money for such service from VšZP. If treatment
proved itself successful, other
providers would also be able to
ask for money covering such
services, according to Faktor.
When Forai took the helm
of the insurer the price for the
treatment increased from €30
After Kostka started to
make headlines in Slovak media other doctors began complaining that his firm has significantly higher limits for
patients than they do. Health
insurer limit is a budget which
the insurer has for the services of one doctor per month.
If a doctor exceeds the budget,
the insurance company will
not pay for those additional
services or it will give him only
part of the full sum.
Sme compared Kostka’s
limits which he had in 2013 income from VšZP and Dôvera
with the limits of a doctor from
western Slovakia without
specifying his name.
The limit set by VšZP for
treating and healing activities of Kostka’s clinic in the
town of Spišská Belá (Prešov
Region) was €20,460 in
September 2013, while at his
other clinic in Nitra it was
€30,000 in the same month.
Yet Dôvera set a limit of €3,500
for each clinic.
To compare, the doctor in-
terviewed by Sme had a limit
of €4,400 for rehabilitations
which are part of treating and
healing activities and another
€700 for checking people in
discipline of physical medicine and rehabilitation.
Magdaléna
Perichtová
who runs a medical facility in
the town of Dubnica nad
Váhom also complains about
prices.
“We are doing that for 5€
and he is doing that for €45,”
Perichtová told Sme, adding
that the €45 sum is not exaggerated but the problem is
that only Kostka gets it.
VšZP responded that it
covers rehabilitation services
of Kostka clinic in the same
way and with the same sum as
it does in case of other physical medicine and rehabilitation facilities.
Moreover doctors filed a
complaint for allegations that
one of the Kostka Clinics
lacked a rehabilitation doctor,
treatments were carried out by
uneducated employees, not
professionals and Kostka calls
its facilities “clinics” despite
that they are not clinics and
thus he was misleading his
patients,
according
to
Perichtová who told Sme about
the complaint.
To read the whole article,
please go to www.spectator.sk.
FRAUD: Fico’s accusations could backfire during vote
Continued from pg 2
The case that Fico pointed
to, however, is not completely
new and Smer’s top regional
politician in Trnava, Renáta
Zmajkovičová, had used it
against Matovič, who lives and
had his business based in
Trnava, in 2010.
Matovič sold his Region
Press company to one of the
company’s employees, Pavol
Vandák, for 122 million Slovak
crowns (about €4 million), in
order to avoid a tax audit, according to Fico. He claims that
on the day of the sale, 121 million crowns were transferred
from the company’s account to
Matovič’s personal account and
the remaining 1 million was
kept in the company in cash.
Vandák, who is selfemployed and worked as a
newspaper delivery man, “was
practically Matovič’s employee”, as Fico put it. He allegedly
bought the company one day
before the planned tax audit in
August 2008. Two months
later, Matovič backed out of
the contract, according to Fico.
The documents that Fico
showed journalists to back his
claims are photocopies of the
contract between Vandák and
Matovič and other documentation surrounding the sale.
That includes the statement of
Vandák in front of the tax authorities “where he confirms
that the books of the company
ended up in the paper waste”,
Fico said.
The prime minister refuses to say where he obtained
the documents. He only said
during the political talk show
broadcast by the private TA3
news channel on February 14
that he received it from a
private person. He will reveal
his or her name only after the
matter is investigated.
Matovič meanwhile confirmed the documents Fico exposed were authentic but said
he did not remember backing
out of the contract two months
after it was sealed. Despite
that, he labelled Fico a liar.
Fico in turn labelled
Matovič a liar too. Matovič lied
when he said he did not remember whether he backed out
of the deal, according to Fico.
Vandák speaks out
Meanwhile, the police
started dealing with the case
and by February 8 Vandák was
called in to be heard as a witness. The police did not disclose information about the
meeting but Vandák provided
the records of his hearing to
the SITA newswire.
Vandák did not discard the
books of the company after he
purchased it from Matovič, but
Matovič did, he said.
He also claimed in front of
the police that he only signed
papers that Matovič presented
to him, without knowing what
he was actually signing. He said
he trusted Matovič because they
grew up together, SITA reported. Matovič allegedly promised
Vandák a lifelong rent payment
of €1,500.
“Pavol Vandák’s statement
unfortunately contains a pile
of nonsense, lies, and halftruths and I will, of course, react accordingly,” Matovič told
SITA and added he was sorry
that Vandák allowed himself
to be “politically abused”.
Matovič talks with police
Matovič handed in more
than 60 boxes of documents
related to the Region Press
company to NAKA on February 15. The documentation
relates to 1997-2008 excluding
the years 2002 and 2004.
The handover of the documents took place in the presence of Daniel Lipšic, who is
his lawyer but also the leader
of NOVA, which has members
on the OĽaNO slate for the upcoming general election, the
TASR newswire wrote.
Matovič claims that the
boxes with documents are evidence that no tax fraud took place
during the sale of Region Press.
A NAKA investigator collected the documents in front of
Matovič’s grandmother’s house
in Borová (Trnava Region)
where they were being stored
in the loft. As the house owners, Matovič’s family members
wouldn’t allow him to enter the
house, he agreed that the documents could be carried down
and put in front of the building. Matovič and Lipšic were
surprised that an investigator
was collecting, packing and
sealing whole boxes rather
than individual documents.
They claimed that the security
of the delivered documenta-
tion is not guaranteed and that
it could be manipulated, as reported by TASR. They also alleged there might be political
influence on the investigation.
Police Corps President
Tibor Gašpar however responded that the police are investigating the case in compliance
with the Criminal Code,
without being influenced from
the outside.
“I’d like to respond to the
lies and half-truths regarding
the approach of the police in
this case,” Gašpar said of his
decision to make public statement, as quoted by TASR. He
added that this will be the final police statement on the
case prior to the March 5 general election.
Matovič testifies
Matovič was meanwhile
invited to testify before police
on February 17.
“I don’t have anything to
hide; I’ve come to repeat it,”
Matovič said, as quoted by
TASR. “If you’re interested in
my personal feelings, then I’m
going there with a sentiment
of someone standing against
an absolute power play.”
He eventually spent four
hours with the police investigator.
“As for the course of the
questioning, I think that it was
carried out appropriately by
both the investigator and the
prosecutor present,” Matovič
said after the hearing, as
quoted by TASR. “It was an 11page testimony. I didn’t say
anything new apart from what allegations against Matovič,
already had been said in the Mesežnikov added.
media.”
He also does not think that
the suspicions will have any
Impact questioned
significant impact on the voters’
support of OĽaNO. People who
Mesežnikov compares the still support Matovič despite
case with the campaign led by various scandals he has been
Fico before the 2014 presiden- connected to will remain loyal
tial elections against his rival to him, Mesežnikov suggests.
Andrej Kiska. He kept accusing
Sociologist Pavel Haulík of
him of usury, referred to some MVK polling agency even precontroversial cases and even dicts that the case may, parasearched for some victims.
doxically, increase the sup“It seemed like an intelli- port for OĽaNO movement.
gence operation,” he said.
“A Slovak voter does not
The accusations however perceive
the
arguments
have not resulted in any crim- brought by similar conflicts as
inal investigation, and this is relevant,” Haulík told The
likely to happen also with the Slovak Spectator.
CULTURE
www.spectator.sk
Choreographer’s return
home worth a dance
BY ZUZANA VILIKOVSKÁ
because we are serving them,
we are in fact servants. We
cannot be artists and do this
for ourselves; it’s done for
people.
Spectator staff
SLOVAK Dances, as the name
suggests, is a musical arrangement that lends itself to
dancing. Composer Peter
Breiner, a Slovak who now
resides in New York City, says
that it is inspired by Johannes Brahms’s and Hungarian
Dances,
Antonín
Dvořák’s Slavonic Dances and
eastern-Slovak folklore. The
Slovak National Theatre (SND)
thought it a pity not to give it
some choreography.
Natália Horečná was called
in. After a childhood in Bratislava, Horečná left Slovakia in
1994 aged 17, and started
studying, dancing (as a soloist
in the Hamburg Ballet), and
later working as a dancer /
choreographer in Hamburg,
for Scapino Ballet Rotterdam
and Nederlands Dans Theater,
as well as other theatres. In
2014, Horečná won the Taglioni European Ballet Award in
category Best Young Choreographer given by the Vladimir
Malakhov Foundation.
The Slovak Spectator
talked to her about returning
to her homeland and collaborating with Breiner shortly
before the premiere of Slovak
Dances: Lives of Lights on February 19.
The Slovak Spectator (TSS):
Whose idea was this project?
Natália Horečná (NH):
Three days after the premiere
of my work at Innsbruck ballet, I received the call from
head of SND ballet section, Mr.
Jozef Dolinský, who asked me:
“Why don’t you do a ballet for
us?” I had a chunk of free time,
so I said, “Yes, of course,” and
then he said the nice part – that
I can do it with Mr Breiner.
TSS: What feedback have you
received?
NH: Well, I am invited
back to the theatres, and this
is my 33rd choreography in
fact. So in the nine years as a
choreographer, I have been
busy.
Choreographer Natália Horečná
This was one and a half years
ago.
The build-up was very
beautiful because I received 16
songs, and then I told Maestro that this was perhaps too
long, and if he didn’t mind, I
would chop it down to 13; and
maybe make some adjustments. And he said to me: “You
have my green light, whatever
you want, just tell me on time,
and I’m fine.” It was wonderful to work with him – he allowed me everything; and he is
a great person. So I took it; and
I puzzled things together because hearing the music, and
wanting to celebrate the togetherness, coming back, being together as human beings, as society of Europe, of
the world… I just wanted to
make a huge celebration of this
all. I said to him: “I don’t want
any sad dramas – let’s celebrate, be with people.”
Peter Dedinský (Janko), Ana Beschia (Anička).
Photos: Peter Brenkus
TSS: So it is a story?
NH: I didn’t want to kill the
public with all sorts of difficult, complicated stories – the
music is beautiful enough,
dancers are gorgeous; and I
wanted to do something
simple but in a way also difficult. It is a story of typical
characters of Slovak folklore,
Janko and Anička, who live in
a city which has lost its eternal lights. Ján is looking for his
own light, as does Anička, and
it is a journey about looking for
one’s own light inside.
When considering how to
express all this in a way accessible to the public, I
thought about a very simply
constructed story. Ján goes
and looks for the light, showing us our own journey. So it is
a journey and a celebration inside of us. There is so much
negative on our planet and we
need to go back to our hearts.
I feel that this world is suffering a huge disconnection
from the heart. For me, the
music was a complete, perfect message for what I want
to say.
TSS: What style of dance did
you choose?
NH: I call my style a dirty
neo-classic style because it is
basically neo-classic with a lot
from folklore, jazz a bit here
and there, all sorts of mixed
elements; as the music also
has many variations, many
stories and many colours. But
the bottom line would be that
it’s done in neo-classical language – which is, with me, a bit
more earthy, a bit more
grounded. I want dancers to
really enjoy themselves, and
that is the main thing. They
love what they do, if they understand, free themselves and
get used to my movements. In
these last rehearsals, they
really start to let it fly.
And when this happens, I
can pass it on – give it to people
TSS: How is it to come back to
Slovakia?
NH: When I try to feel the
energy of the land, I see it as a
beautiful sunny land. The other thing is what people sometimes do within the land; but
I know they are not evil. I don’t
want others to talk about it in
a bad way; Slovakia is really a
beautiful country. For once, I
want to be kind to this land
with all its mountains and
lovely sites. It is just like any
other country in the world,
and I think the time has come
to really embrace it. I don’t live
here but it doesn’t mean I don’t
embrace it. It’s been 22 years
[since I left], and it is a good
feeling to come back.
It is my homeland and I
pay huge respect to that; and I
treat myself and people here
nicely. But there are great
people everywhere. I work
here and there, and everywhere I work is my home. I feel
like a global person, and I think
the world would be much nicer
if everybody felt this way.
There are many different cultures, and it is wonderful to
celebrate that. To find a fine
balance between cosmopolitanism and being rooted at
home.
TSS: What is your connection with folklore, with
eastern-Slovak folklore more
specifically?
NH: I love Slovak folklore: as a little girl, I saw performances of SĽUK, of
Lúčnica, and I also saw my
classmates doing folklore.
Here, I thought: Why not use
some folk steps? Why not put
some sweet parts of this culture inside? But I am not a folk
dancer and I create ballets;
and dancers are not professional folk dancers either. I
come and see what I can do,
and what I cannot. As for dancers, I am not here to bash
them, just to take what they
have already, and continue
from there.
TSS: What has this project
meant for you personally,
emotionally?
NH: This project is great, it
is my other child. I have
already 33 children; and so I am
very happy because I am a
truly productive mother. And
I am always pregnant, so to
say, which is wonderful.
February 22 – March 6, 2016
11
Nitra theatre’s jubilee
is bad season
THE OLD Theatre in Nitra
celebrates two anniversaries
in 2016: the 65th anniversary
of its founding and the 75th
birthday of the man who
worked there for 20 years and
whose name it bears, actor
and director Karol Spišák.
Besides dispensing some
free tickets (for every 65th
visitor) and apart from a
special celebration on March
4, a festive unveiling of a
wooden statue of Spišák was
slated for February 12, the
TASR newswire wrote.
However, this did not take
place, as the family of the
late Spišák (11 members,
most of whom are actors and
directors, including a son
and a grandson who worked
as director in this theatre)
protested against this statue
being festively launched by
the current director of the
theatre, Martin Kusenda.
They argue that he is incompetent in both artistic
and managerial issues and
his autocratic way of directing the theatre, without a
dramatic advisor and an internal director, helps split
the house and shows disrespect for everything which
was achieved under Spišák
(who died in 2007).
Kusenda reacted by saying that he respected their
opinion and refused to comment on it, denying also that
there would be any festive
unveiling of the statue – as it
had already been previously
exhibited in public, in the
nearby shopping mall.
However, the festive unveiling was on the theatre’s programme, the SITA newswire
wrote.
tee that could, ultimately,
choose a new theatre director.
The leaving actors, directors and artistic employees
argue they are saving the
artistic quality of the Old
Theatre, while Kusenda accuses them of ruining the
season.
Ongoing disputes
Voice of insider
This is just the tip of iceberg, as the disputes within
the theatre are of longer
duration, and since the new
director came six months
ago, six employees have
already resigned and seven
more are leaving, with their
resignation notices being
due by April. They include
also director Ondrej Spišák,
son of Karol Spišák, and his
grandson Šimon, also a director. The number means almost half of the artistic employees of the theatre, those
leaving pointed out.
They wrote an open letter
to the governor of Nitra Region, Milan Belica, asking
him to replace Kusenda. Belica answered, as quoted by
TASR, that he was not in
charge, that Kusenda was the
statutory of the theatre and
that he had been selected by
a committee; adding that
only regional councillors,
and not governor, could replace him.
The leaving artists argue
that the committee did not
contain any expert on
theatre, and they offered
several well-known personalities from the theatre life to
be included on the commit-
Former dramatic advisor
of the theatre, Ivan Martinka, said in an interview
for Sme that in a way, the
situation can be indicative of
the whole Slovak culture.
“The contemporary,
current art is perceived as
something strange, unconceivable, sectarian; but just
as people learn to control a
PC, they should learn to understand art and respect its
value,” he said, adding that
behind this development is
the fact that money has become the only real value in
the society. “But when
someone does not defraud
money but rather betrays
the sense of things, he ruins
soul and thwarts the creative work of many artists who
mean something in this
area, which is the same loss
as is the material one.”
Martinka added that the
situation can be repeated, as
soon as a replacement director of the “new” Andrej
Bagar Theatre in Nitra will be
selected, to replace the outgoing, long-time head, Ján
Greššo.
Internal Situation
The truth is that before
Kusenda, artists from the
theatre were also dissatisfied
with actor Roman Valkovič
who was to become theatre
director last year. They protested in person to regional
councillors, who then accepted their protests and did
not appoint him, the Nitra
regional version of the Sme
daily wrote.
The truth also is that the
theatre was nationally respected for progressive, interesting pieces that were
able to attract both more
traditional and new visitors,
children and adults, the
Pravda daily wrote, naming
pieces like Jánošík, Palculienka /Thumbelina, Three
Little Pigs, Dogville, or
Wonders for Alice.
The daily quoted Kusenda
as saying that he deemed it
uneconomical to employ two
internal directors and two
visual designers, and reacting to some of the accusations mentioned in the
protest letter against him
sent to Belica, councillors
and also media, he said he
had initiated several audits
to check more thoroughly on
the events in the theatre over
the previous years.
Compiled by
Zuzana Vilikovská
12
CULTURE
February 22 – March 6, 2016
Middle Ages in Hájniky
Western Slovakia
Bratislava
n CLASSICAL
MUSIC: Franz
Schubert – The renowned musician composed mostly sad
melodies, bringing thoughts
about death – due to his ill condition. His period of Zimná
cesta / Winter Journey is a
confession of a Nomad without
hope, love and belief. Schubert
called it a period of horrible
songs. This time, it will be performed by Gustáv Beláček
(bass-baritone), Peter Pažický
(piano), Szidi Tobias (reciting).
Starts: Feb 23, 19:00; Slovak Philharmonics, Medená 3.
Tel: 02/2047-5218. Admission:
€8. More info: www.filharmonia.sk.
Bratislava
n CLASSICAL
THIS postcard from the 1920s
depicts the village of Hájniky
in central Slovakia. As the
Slovak name hints – háj means
wood – the royal forest
guardian used to live
here. The village is
close to the town of
Zvolen, with an important
mediaeval
castle from which
Hungarian kings and their
guests started their hunts.
The remarkable earlygothic church of St Nicolas
also dates back to this era. In
small municipalities churches
were places where people –
from the wider neighbourhood found refuge from en-
emies; most frequently during Ottoman wars. In these
troubled times, the church
was seriously damaged.
In 1804, a belltower was
added to the church. In it one
of the heaviest bells in Slovakia – Mikuláš (Nicolas) –
hangs. Foundered in 1512, it
weighs 5.1 tonnes and is truly
impressive. Thanks to this,
Mikuláš escaped the sad fate of
many bells. During Ottoman
wars, but also during World
War I, such bells were frequently melted down and
turned into ammunition.
However, it was
impossible to remove this bell
from
Hájniky
belltower
because
of
its
weight.
Fans of old art can enjoy
Hájniky, as a local temple has
preserved its marked mediaeval style. The church looks
different though as pointed
church tower collapsed amid a
strong gale in 1928.
By Branislav Chovan
Slovak history presented
HISTORY-seeking visitors to
the Slovak capital were disappointed until recently, as
such exhibitions had been
lacking. However, in midFebruary, the first part of History of Slovakia was unveiled
at the Bratislava Castle, covering the earliest periods of
the territory’s history up to
the times of Great Morava
(9th-10th centuries).
The (at least partially)
permanent exhibition comprises about 1,500 exhibits on
600 to 700 square metres.
Most of them are items found
on Slovak territory, be it originals or replicas, but there
are also models and visualisations of buildings, some of
which have not been preserved – or just minor parts,
not offering a complex image.
From the earliest prehistoric times, from about half a
million years ago – when the
first evidence of ancestors of
Homo Sapiens was found here
– to the first appearance of
farmers, the late Stone Age,
Bronze Age, through Celtic
settlement, Roman times, the
turbulent migration period
when several tribes arrived
here, some of them to remain,
and the settlement of Slavs, to
the Great-Moravian times. The
presentation includes tools,
dishes, cult and religious
items, jewels (notably, with
militant Pannonian Avars
mostly men decorated themselves), but also weapons,
bones and means of payment.
Two museum directors
falling under the Slovak National Museum, the Historical
Museum (residing at the
castle) Branislav Panis, and of
the Archaeological Museum,
Juraj Bartík, said that it was
difficult to choose exhibits,
adding that apart from
strictly scientific criteria, also
aesthetics were included in
the selection process.
Asked about specialties
and unique findings presented, he named the Venus from
Moravany (made of mammoth tusk ivory and dated to
22,800 BC), Roman-times golden bracelet from Zohor (whose value is unique in central
Europe from an art-craft
viewpoint), golden appliqués
from Tibava (around 4,000
BC), complete set of dishes
from Očkov burial mound
(around 1,200 BC), golden
treasure from Barca (around
1,600 BC); or, from later times
of Great Morava, the mighty
sword – probably of a prince,
the remnant of which is displayed alongside a replica.
The next parts of the History of Slovakia, to cover the
Middle Ages and modern history of the country, will be
gradually
opened
later,
“hopefully by the 100th anniversary of the creation of
Czechoslovakia” in 2018,
Panis said. When complete,
the exhibition will cover one
full floor of the castle.
The descriptions of exhibits are also in English and
there is also a bilingual booklet available. Later, a catalogue will also be added.
By Zuzana Vilikovská
To read the full story,
please go to www.spectator.sk.
MUSIC: Four
Hands for Rachmaninoff –
Rare music project provides an
opportunity to listen to a complex set of songs by Sergei
Rachmaninoff for different
combinations of instruments
accompanying piano. Visitors
will be able to hear and see at
least two pianists playing
simultaneously. In total 15 pianists will try to discover the
complex work of Sergei Rachmaninoff during the evening.
Starts: Feb 24, 19:00; Dvorana Hall of VŠMU, Zochova 1.
Tel: 0905/403-032. Admission:
€1-€3; booking at info-htf@
vsmu.sk. More info: www.
htf.vsmu.sk.
Bratislava
n LIVE MUSIC:
Saxophone
Syncopators – Four saxophone
musicians present music
based on an authentic interpretation genre of ragtime in
arrangements for four saxophones. They use period instruments from the 1920s. The
band is composed of Pavol
Hoďa (soprano saxophone),
Ján Gašpárek (alto saxophone), Ladislav Fančovič
(tenor saxophone) and Frederica Babuliaková (baritone saxophone).
Starts: Feb 28, 10:00;
Mirbach Palace, Františkánske
Square 11. Admission: €2. Tel:
02/5443-1556(-8); www.saxophonesyncopators.com; www
.citylife.sk.
NETHERLANDISH Painting is the exhibition in the Slovak National Gallery (SNG) which offers more than 250 Dutch and Flemish works of art
from 1500-1800, coming mostly from original collections from Slovakia. The paintings primarily focus on the morals, the short span of
human life, family life and close connection to nature, offering genres
like landscape, genre paintings and portraits. The exhibition running
until May 22 is in the Esterházy Palace in Ľ. Štúra Square 4 in Bratislava is free of charge. More information can be found at
www.sng.sk.Picture: L.van Valckenborch – G. Flegel, Summer Allegory. Around 1595.
Photo: Courtesy of SNG
subtitles.
Starts: March 2-5; 18:00;
and Michal Horáček – Famous Lumière cinema, Špitálska 4.
Serbian film director (who Admission: free. More info:
disclosed that he has a special www.aic.sk/ kinolumiere.
relation to Slovakia and the
Czech Republic, as he had
Central Slovakia
studied in former Czechoslovakia) and also musician Emir Žilina
Kusturica (who also directed n CLASSICAL MUSIC: Violin
globally famous films) will Workshop / Husľová dielňa –
perform with his No Smoking Slovak Sinfonietta (ŠKO) Žilina
Orchestra, supported by Czech plays with conductor Maroš
songster Michal Horáček.
Potokár, violin soloists JinStarts: March 1, 19:00; dřich Pazdera, Jakub Girašek,
Incheba – Expoaréna, Vieden- Viktor Janoštín, and Martin
ská Cesta 3-10. Admission: €25. Pavlík, works of Mozart, SaintTel: 02/5293-3321; www.tick- Saëns, Charles de Beriot and
etportal.sk.
Antonín Dvořák.
Starts: Feb 25, 19:00; House
Bratislava
of Art Fatran, Dolný Val 47. Adn FILM FESTIVAL: Japanese mission: €6-€10. More info:
Film Festival 2016 – This fest- www.skozilina.sk.
ival in Bratislava will offer four
contemporary Japanese mo- Banská Bystrica
vies – Dancing Karate Kid, n OPERA: Ján Cikker – Juro
Kanzaburo, High Kick Angels Jánošík – The opera of Slovak
and King of Excuses – which composer Cikker about nareflect various aspects life tional hero premieres in the
there, connection of martial State Opera, as rehearsed and
arts and dance, or show the conducted by Marián Vach,
traditional national theatre, stage by Jaroslav Valek, cosKabuki. All films are in Japan- tumes by Peter Čanecký, direse, with English and Slovak ected by Roman Polák.
Starts: March 5, 18:30; State
Opera Banská Bystrica, Národná 11. Admission: €8. Tel:
048/2457-123 or www.stateopera.sk.
Bratislava
n LIVE MUSIC: Emir Kusturica
Eastern Slovakia
Košice
n GASTRONOMY: Restaurant
ALCINA, the baroque opera by G. F. Handel, opens at the State Theatre
Košice (SDKE) as rehearsed and conducted by Marek Štryncl (alternately also by Jan Novobilský), and directed by Linda Keprtová (who
also made the stage), costumes by Danica Hanáková. The opening is
on February 26 at 19:00 in SDKE, in Hlavná 58, Košice. Tickets for the
premiere cost €4-€15, for re-runs €4-€10. They can be bought via
www.navstevnik.sk or 055/2452-269 (daytime), 055/2452-260 (evenings). More information can be found at www.sdke.sk.
Photo (from rehearsal): Svjatoslav Dohovič
Day – Within a multicultural
setting, people from Košice,
but also other regions, are
welcomed to international
cuisine presenting meals – and
cultures – from different
corners of the world. Organisers hope that via food, other
nationalities will present their
own culture.
Starts: Feb 21, 15:00;
Tabačka KulturFabrik, Gorkého 2. Admission: free. More
info: www.tabacka.sk.
Compiled by Spectator staff