The opposition United Left (ZL) have drawn up a draft bill that would enable companies such as utilities to write off debt to the poorest in exchange for tax breaks.
The proposal is "good for both sides in that it offers the poorest a chance to make a fresh start and companies to clean up their balance sheets in in a simple and cheap way", ZL leader Luka Mesec says.
Presenting the proposal to reporters on Tuesday, Mesec said that Slovenia had been busy tackling the economic and financial crisis for seven years, during which time austerity took its toll on citizens.
He said that 291,000 people lived below poverty line in Slovenia, 55,000 of them children. An increasing number cannot pay for basic expenses such as utility, power mobile phone bills and TV license fee.
He cited the example of mobile provider Simobil, which Mesec said had 214,000 accounts worth EUR 22m open because of customers unable to pay their bills.
Following the examples of Croatia, Hungary, Macedonia and Iceland, the ZL proposes a one-off debt write-off by electricity, gas, heating, utilities, rent and telecommunications service providers.
The write-off would be open for the beneficiaries of social transfers and those whose monthly net income in the past 12 months was less than EUR 593.
To prevent abuse, the ZL proposes for the write-off to be out of bounds for people owning more than one property. The write-off would only be possible for debts due by 31 December 2014.
A three-stage procedure is proposed; the Financial Administration would first invite companies to apply by the end of August, then households would put forward proof of eligibility, which would be followed by a write-off.
The companies writing of debts would be eligible for deduction of corporate income tax and VAT equalling the amount of the write-off.
The proposal would benefit some 200,000 people, but Mesec could not say how much it would mean in lost tax revenue. He believes though that it could be partly offset by higher consumption by those who had their debts cancelled.
Mesec expects the ruling coalition to back the bill, while he rejected the suggestion the proposal was the product of rivalry between his party and the coalition Social Democrats (SD).
The Ministry of Labour, Family and Social Affairs, which is run by SD member Anja Kopač Mrak, is drawing up a similar bill, but Mesec said the ZL aimed at the state level, while the ministry targeted the level of municipalities.
Source: The Slovenia Times
