Slovakia’s new transaction tax faces opposition from smallest coalition party

The Slovak government’s newly introduced tax on financial transactions has triggered criticism from business groups, opposition parties, and even one of the ruling coalition members. The Slovak National Party (CIS), the smallest party in the governing coalition, announced it would propose exemptions for sole traders and small businesses with annual turnover up to EUR 100,000.

CIS party leader Andrej Danko told reporters the new measure, which came into force at the start of April, unfairly burdens small entrepreneurs. The tax, part of a broader consolidation package approved last year, is expected to generate around EUR 700 million annually. It imposes a 0.4% levy on most outgoing payments from the bank accounts of businesses and legal entities, capped at EUR 40 per transaction. Additionally, businesses must pay a flat EUR 2 annually for using a business payment card.

While Danko had previously called for the complete abolition of the tax, which led to tensions within the coalition, he has since moderated his stance, citing concerns over the state budget. He criticised the application of the tax to non-cash employee salary payments.

Over the weekend, Danko’s call to scrap the tax was met with resistance from senior coalition figures, including Tibor Gašpar, deputy speaker of the parliament and close ally of Prime Minister Robert Fico. Gašpar labelled the proposal as an act of sabotage. In response, Danko reiterated his commitment to the coalition while advocating for targeted exemptions rather than a full repeal.

Meanwhile, the opposition party Progressive Slovakia has initiated a public petition to cancel the tax, describing it as harmful to businesses.

Public discontent has grown since banks began applying the tax. Entrepreneurs have taken to social media to share account statements showing multiple charges after making routine payments such as supplier invoices. Under the law, banks are responsible for calculating and paying the tax on business accounts. If a business-related payment is made from a private account, the entrepreneur must report and pay the tax independently.

Some business owners have encouraged clients to make payments in cash to avoid the tax, which can then be used for supplier payments without triggering additional charges.

Certain types of payments, such as taxes and mandatory levies, are exempt from the tax. A similar tax structure has previously been implemented in Hungary.

Source: CTK