Government Seeks to Cap How Much the State Can Collect in Taxes

Janez Janša’s government wants to place a ceiling on the state’s total tax revenue as a share of gross domestic product, presenting the proposal as a way to give businesses greater stability.

Janša outlined the so-called tax anchor at the Forum of Crafts and Entrepreneurship. According to information cited by Delo, the idea is believed to be his, while the Finance Ministry describes it as “the highest possible level of taxation across all taxes,” or an upper limit on total tax revenue relative to GDP.

The government intends, according to the information available so far, to write the tax anchor into the constitution. That would require the support of 60 members of parliament.

Some countries have used similar revenue rules in the past, but most now apply them cautiously. The IMF warns that tax revenue depends heavily on the economic cycle and that an overly rigid rule could create difficulties during a crisis.

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The tax anchor will define the highest possible level of taxation across all taxes, or, in other words, the share of...