KPMG Says Countries Accessing the EU are Leaders in Tax Cuts

A global trend of reducing income taxes of corporate entities is persisting. Even though member countries of the European Union (EU) have already cut taxes, they were brought down most significantly in countries accessing the EU, including Poland and Slovakia. Among the newcomers, Slovakia is exceptional when it has united its income tax of corporate entities and private individuals and the value-added tax to 19 percent. KPMG, providing business consulting and helping manage business risks, writes this in its annual survey of local income taxes of corporate entities in 69 countries.

Trading on Slovak Stock Market has not Resumed So Far

Trading on the Slovak stock market has not resumed even on Wednesday morning, since the banks have not signed a contract on the temporary solution fort the new central depository system using certain technical features of the old system. Zelmira Habanova, spokeswoman of the Central Securities Depository (CDCP), told SITA that after signing the contract the trading might be resumed later during the day. CDCP is interested in resuming the trading as soon as possible, she added. According to her commercial banks as the largest stockbrokers tested the new central depository system on Tuesday successfully.

Average Interest Rate on Bank Loans was 7.61 Percent in February

The average interest rate on bank loans in February rose 0.08 percentage points to 7.61 percent from January 2004. The average interest rate on business loans increased moderately, up 0.01 percentage point to 7.37 percent. In the category of personal loans the interest rate dipped 0.52 percentage points to 9.68 percent, the National Bank of Slovakia (NBS) informed on Wednesday.

Finance Ministry Submits Draft Rules to Stimulate Regional Investment

According to the draft rules for regional support of strategic investments submitted by the Finance Ministry for interdepartmental discussion, the government should only provide investment stimuli for strategic investments in those regions in which the unemployment rate for the previous year exceeds the national average. Currently, four regions – Banska Bystrica, Nitra, Presov, and Kosice – would be eligible for government investment stimuli. In other regions the government would provide investment stimuli for investments exceeding EUR 500 million or for investments into sectors of advanced technologies, such as information technology, nanotechnology, biotechnology, etc.

Civil Association Criticizes Revised Draft of Health Care Bill

The civil association Citizen and Democracy stated on Wednesday that the revised draft of the health care bill drawn up by the Health Ministry does not allow the photocopying of medical records by patients or their legal representatives. The legislative council of the government will discuss the draft bill on Thursday and decide whether to submit it to the cabinet in a revised version. The original draft of the bill enabled patients to photocopy their own medical records, and extended the right to also include some specified persons. The association pointed out that during interdepartmental review of the original draft, the text now no longer guarantees this right. The association also criticized the draft bill for limiting the access of law-enforcement authorities to medical records – even for the purpose of investigating the counterfeiting of these documents. According to the valid penal order, police are authorized to access medical records if there is suspicion that they are counterfeit, but the proposed draft bill denies this right.

SES Tlmace to Start Works on its SKK 1 Bln. Contract in Cuba

Power engineering company SES Tlmace will soon start working on an over SKK 1 billion contract in Cuba. According to Pavol Svolik, the director of SES Energo Caribe, the Havana-based daughter company of SES Tlmace, the contract signed in 2002 between SES Tlmace and the Cuban companies Ceproniquel and Eini to build a new power station only became valid on March 1, 2004, after the securing of a long-term loan and financial coverage for the project.

German VNG Invested SKK 600 Mln. into Slovak Heating Plants

Verbundnetz Gas AG (VNG) energy group from eastern Germany has invested roughly SKK 600 million into three heating plants in Slovakia over a period of three years. These companies are Ruzomberska Energeticka Spolocnost, a.s. (R.E.S.), Prievidzske Tepelne Hospodarstvo, a.s. (PTS) and Nitrianska Teplarenska Spolocnost. Investments were used to transform and modernize heating and warm water distribution networks. Klaus Erdbrink, chairman of the boards of directors of the three heating plants, said that VNG plans to invest additional SKK 1.4 billion into the Slovak companies. “Through the reconstruction and modernization of the distribution network we want to achieve heat savings of between 10 and 15 percent,” said Mr. Erdbrink.

Growth in Mergers and Acquisitions is above CEE Level in Slovakia

The number of transactions on the mergers and acquisitions market in Slovakia grew 20 percent over 2003. Thus it was 10 percentage points faster than in central and eastern Europe (CEE). The total estimated value of the Slovak mergers and acquisitions market more than doubled from USD 291 million in 2002 to USD 653 million in 2003. The average value of transactions in the private sector decreased from USD 8 million to USD 5 million over 2003 after the exclusion of transactions above USD 100 million. These figures stem from a survey of PricewaterhouseCoopers (PWC) on mergers and acquisitions in central and eastern Europe in 2003. “Changes in the tax regime and the favorable costs base, especially wage costs, are helping Slovakia to a large extent in becoming an attractive country for investing,” said Geoff Upton, PWC department director for mergers and acquisitions for the Czech Republic and Slovakia.

Central Bank Governor Considers SKK Exchange Rate Stabilized

National Bank of Slovakia (NBS) Governor Marian Jusko stated on Wednesday that the exchange rate of the Slovak crown is currently stable. He suggested that the central bank’s decision on Friday to cut the key interest rates by 50 basis points aimed to stabilize the exchange rate. But the governor said that it is questionable whether or not the lowering of interest rates has influenced the crown’s exchange rate. The exchange rate of the Slovak crown has continued to remain near historic strongest levels, as Wednesday morning the crown again reached its historic maximum of 40.100 SKK/EUR.

SkyEurope Low-Cost Airline to Launch Flights to Warsaw in May

Slovak low cost airline company SkyEurope Airlines plans to expand to the Polish market after setting up a new base for itself at Warsaw Airport. SkyEurope director general Christian Mandl said that on May 2 the company opens new flights from Bratislava and Budapest to Warsaw. Moreover, on June 14, the airline will start direct flights from Warsaw to London, Paris, and Amsterdam. In the autumn, SkyEurope Airlines will be flying from Warsaw to Rome, Milan, and Zurich. SkyEurope plans to transport 200,000 Polish passengers this year.

Visa Card Spending by Slovak Clients at USD 2.27 Bln. Last Year

Last year the volume of spending carried out using VISA cards by their Slovak holders in Slovakia rose to USD 2.27 billion, representing a 67 percent year-on-year growth. VISA card payments through POS terminals grew 80 percent over 2003 to reach USD 309.4 million, Visa Cemea regional manager for Slovakia, Miloslav Kozler told SITA. The total number of shop transactions via Visa cards increased 60 percent to USD 12.4 million.

Market Regulator Claims Securities Trading System Can be Used

The Slovak Financial Market Office (UFT) announced on Wednesday that all shortcomings, preventing the securities market from functioning properly, have been removed. Representatives of the UFT, the Finance Ministry, the National Bank of Slovakia (NBS), the Central Securities Depository (CDCP), the Bratislava Stock Exchange (BCPB) and commercial banks have found technical and legal ways to launch the new central depository system using certain technical features from the old system, said UFT spokesman Marek Kacmar. Last week Slovak stock market trading was paralyzed. Banks stopped trading because they were unwilling to trade in securities due to the insufficiently prepared system for registering, clearing, and settling security transactions in the CDCP, which took over responsibility for registering stock market transactions from the Central Securities Register (SCP).

SES Tlmace Power Engineering Company Earned SKK 8 Mln. in 2003

Power engineering company SES Tlmace closed the year 2003 with a gross profit of SKK 8 million. According to economic director Viliam Ondrasik, the creation of reserves for possible risks from export projects affected economic results last year. SES Tlmace reported total revenues of SKK 6.11 billion while the generated added value amounted to SKK 911 million.

Cabinet Approves Paying a One-Off Contribution for Pensioners

At its meeting on Wednesday the Slovak cabinet approved a draft bill on the basis of which pensioners will get a one-off state contribution of SKK 1,000 to compensate for their increased living costs linked with tax reform. Pensioners who are, or will become eligible for pension payments by the end of June will get the payment in July, while persons who become eligible for pensions in the period between July 1 and December 31 will get the contribution with their first pensions.

Landowners on Planned Kia Site in Zilina Petition the Cabinet

Dusan Mikulik, representing landowners from four municipalities near Zilina, delivered a petition to the Cabinet Office on Wednesday, protesting that the price offered is too low at which the government offers to buy up for the future Hyundai/Kia plant. The petition signed by 1,240 landowners is asking for SKK 350 per square meter. The market price of the land was officially set at about SKK 95 per square meter.

MONEY MARKET: Banks Easily Meet March Reserve Requirement

Banking houses easily met the minimum reserve requirement for March at 100.14 percent when they deposited SKK 9.968 billion in their reserve accounts in the central bank on Wednesday. The central bank set the April minimum reserve requirement at SKK 15,838 billion, said Tatra Banka dealer Jozef Bozek. The persisting liquidity surplus on the money market will amount to around SKK 7 billion on Thursday, he specified. On Friday, the inflow of about SKK 5 billion from maturing government bonds will increase the liquidity surplus further in the banking sector, reported the dealer.

Chamber of Agriculture Launches Campaign to Buy Slovak Foodstuffs

The Slovak Chamber of Agriculture and the Food Industry (SPPK) in cooperation with the Slovak Trade Federation and Union of Businessmen and Employers in the Food Industry launched an event on Wednesday to promote the purchases of food products made in Slovakia. In the first phase of the project they will try to encourage consumers to buy domestic foodstuffs bearing the labels: “Buy foodstuffs made in Slovakia!” “Support our farmers and food processing firms!” SPPK chairman Ivan Oravec announced that the next steps in the campaign would be to decide on negotiations with traders. The aim of the project is to address Slovak consumers and to increase their local patriotism towards Slovak products, in the same way this is done in other parts of the world.

FOREX MARKET: Crown Reaches New Historical Level on Wednesday

The exchange rate of the Slovak crown and the euro reached a new historically strongest level of 40.095 SKK/EUR (middle) on Wednesday. According to VUB dealer Ladislav Benedek, the local currency firmed from the opening 40.120/150 SKK/EUR due to crown purchases by banks. At the close of trading the crown corrected to 40.100/120 SKK/EUR.

Cabinet Okays Healthcare Modernization Project

At its regular session on Wednesday the cabinet approved a healthcare sector modernization project, whose aim is to carry out the proposed healthcare sector reform. The project places emphasis on improving access to healthcare, on fighting against corruption in the healthcare system, and increased efficiency of expenditures. Healthcare sector reform focuses on improving financing and the provision and management of healthcare services.

Civil Aviation Market in Slovakia will become More Open

Slovak civil aviation market will become more accessible for foreign air carriers registered in an EU member country. According to the draft amendment to the law on civil aviation, which should harmonize Slovak legislation in the field of air transport with the norms of the EU, foreign air carriers will no longer be obliged to apply for registration in Slovakia. It will be enough for them to submit certificates from the EU member country, where they are registered. Also tariffs within European Communities will be adjusted. Slovak air transport market will thus be liberalized according to the regulations of the union. The cabinet should deal with the draft of the revised law soon.

STOCK MARKET: Trading Resumes on Wednesday after Ten Days

Trading on the Slovak stock market resumed on Wednesday afternoon after commercial banks signed a contract with the Central Securities Depository (CDCP) on the use of the temporary securities depository system featuring certain technical features of the new and old system. However, no transactions were posted on the Bratislava Stock Exchange (BCPB) floor, leaving the official SAX share index at the level of 181.79 points.

Railway Network Operator ZSR Closes Year with SKK 956.5 Mln. Loss

Railway network operator Zeleznice Slovenskej Republiky (ZSR) reported a loss of SKK 956.1 million for last year. The figure is far higher than that calculated in the ZSR consolidation plan that counted with a loss at SKK 69.4 million. ZSR attributes the higher than expected loss to shortfall of revenues for railway network use, which was mainly the result of decreased transport performance of transport company Zeleznicna Spolocnost (ZSSK). The company also had to create reserves and provisions for events of risk including court litigation, changes in management organization, supplies, unfinished investments and bad claims amounting to over SKK 1.5 billion.

Railway Company ZSSK Posted 2003 Loss of SKK 4.68 Billion

Railway company Zeleznicna Spolocnost, a.s., (ZSSK) closed last year SKK 4.68 billion in the red. Total costs in 2003 were SKK 29.369 billion and total revenues SKK 24.69 billion, reported the company on Wednesday.