INSTITUTE OF ECONOMIC AND SOCIAL STUDIES

Press Release, Bratislava, 8 December 2021. The Minister of Finance has submitted a proposal for amendments to simplify the payment of levies and taxes on labor income. However, two more steps are needed before we can say after the reform that the system is simple and that employees understand the taxes and levies they pay: the abolition of the semi gross wage and the misleading title of ‘employer’s levy’.

Rising consumer prices have become an important issue both in the world and in Slovakia. Although with the current single-digit growth, consumers of the 1970s would have laughed us out, it is good that we are talking about this topic out loud. Perhaps it will help us avoid much bigger problems.

The European Parliament is preparing a vote on new regulations for digital services. Restricting online targeted advertising is also part of this megalomaniac regulatory package. This is an ad that is shown to specific people based on what websites they visit and their demographic characteristics. Well, some MEPs don't like this type of ad and they want to restrict, regulate or even ban it. All in the name of fighting for the right to privacy. Where is the problem?

In 2020, IAB Europe conducted a survey asking Europeans what version of the Internet they would prefer: with no targeted ads but with mostly paid content, or today's model with mostly free content but with targeted ads. The vast majority of 75% refused to pay for online content. However, the version with paid content would become reality if targeted advertising, which “finances” the internet "for free", got restricted or banned. This may happen as a result of the work of some Members of the European Parliament. 

Despite the unfavourable situation caused by the COVID-19 pandemic and pandemic restrictions in 2020-2021, we were able to hold the fourth edition of the Economics Olympiad, the first comprehensive nationwide competition in economics and finance for high school students in Slovakia. What is more, we were happy to welcome a record number of high school students from all over the country to take part in the competition this year.

The European Commission has presented a proposal for The Digital Markets Act (DMA). Its goal is to create fair and competitive digital markets in the EU. It aims to achieve this by introducing new ex ante regulations that will automatically apply to so-called "gatekeepers". The gatekeepers are to be large internet platforms that meet selected size criteria.

In a new joint publication entitled Economic Analysis of Digital Markets Act, prepared by four think tanks: INESS (Slovakia), CETA (Czech Republic), IME (Bulgaria), and LFMI (Lithuania), we point out the shortcomings of the DMA and highlight the possible unintended consequences of this regulation. In addition, we also suggest a way to modify the proposed procedure for regulating internet companies.

Some respected economists identified the issue of consolidation in Slovakpublic budget already in 2022 as a third-order problem. From an analytical point of view, he is, of course, right. A one-year deficit of 10% of GDP is nothing compared to a permanent two to five per cent deficit in the pension system with a declining workforce. Not lifting the cap that fixes the retirement age in Slovakia may mean the collapse of the public finances as a whole, while a one-year deficit can be corrected by the first responsible government.

The Slovak Minister of Finance claims a tax and contribution burden on self-employed people should be increased in order to be “fair“ in comparison to employees. Why can’t we put a sign of equality between these two statuses? Why doesn’t the term “fair“ make sense?

A few days ago, there was this movie on TV, in which a hero gains superpowers by unlocking the hidden potential of his brain. You know, it’s like “a human uses only XY percent of their nerve cells“, and a right injection or a pill can wake up the rest.