Slovak VAT Collection Efficiency Hits Decade Low, Hampering Budget Consolidation

Slovakia's value-added tax (VAT) collection has reached its lowest efficiency rate in a decade, significantly undermining the government's efforts to balance the national budget. Tax authorities are failing to effectively prevent tax evasion, which is prolonging the period needed for public finance consolidation and making the process more painful for citizens. The poor VAT collection performance means that if the government had achieved its planned collection targets, it could have easily abolished the controversial transaction tax. The declining effectiveness of tax collection is forcing the government to maintain unpopular fiscal measures longer than anticipated as it struggles to meet budget consolidation goals.