Solak: With more efficient state, Slovenia can be a regional development centre

NEWS 25.09.202111:04 0 komentara
Uroš Kokol/N1

Slovenia is a safe country, pleasant to live in and has a highly skilled workforce, a dynamic research and development sector, and currently good economic indicators, according to the speakers at the Slovenia Business Bridge Investment and Development Conference, who stressed that this image is spoiled by high income taxes, primarily by highly paid staff, as well as bureaucracy.

These are the summed up conclusions of the event organized on Friday by the American Chamber of Commerce AmCham and Spirit Slovenia – Slovenia’s Public Agency for Entrepreneurship, Internationalization, Foreign Investment and Technology, which among other things discussed the information that the government has excluded the upper limit of taxable income (tax cap) from the Law on Debureaucratization, for which the entrepreneurship community has been fighting for years.

“We will continue to fight for this measure because we think it is the right way to increase the competitiveness of the Slovenian economy,” said Nevenka Cresnar Pergar, business advisor and chair of AmCham’s American Chamber of Commerce Investment Promotion Commission.

Reference country

“Slovenia is a country with the greatest potential,” said Outfit7 co-founder Iza Sia Login, now an employee of the Login5 Foundation.

“Slovenia has the right size, the right people and location, and it can be a testing ground for anything – I wouldn’t just focus on certain industries. In any case, whichever direction we go, development must be sustainable, because otherwise we will not succeed, no matter what we do.”

She warned that we are currently focusing only on the coronavirus, which is of course a problem for the economy as well.

“But climate change is a much bigger problem. I think that everyone, not just businessmen and governments, should look for possible solutions. The challenge is to develop technologies in the next ten years and respond to that problem.”

Omnipresent state

Dragan Solak, the founder of the United Group, which is the owner of the telecommunications company Telemach and N1 Slovenia in Slovenia, said that this is the country of incredible opportunities.

“Unfortunately, some of them have not yet been materialised,” he said and warned about the strong role of the state in the economy.

“This is never good. When it comes to start-up companies that will create ‘unicorns’ (start-up companies that have rapid growth and become worth more than a billion dollars in a short period of time), the state plays an important role in creating favourable conditions, and then must withdraw quickly. We don’t want to see it anymore,” Solak explained.

This withdrawal means a cheaper and more efficient state, and consequently lower taxes, he stressed and added:

“It is nice to hear that the government is planning tax reliefs for IT professionals, but we employ several thousand Slovenians and I would like to see tax reliefs introduced for everyone. The problem here is that two thirds of the gross salary is taken by the state, only one third is left to the one who works.”

Solak went on to say that such situation makes it difficult to open a regional centre in Slovenia, because it is cheaper in other countries.

“We have just hired a new procurement director at the United Group. Employees at the group level have the opportunity to decide for themselves at which location, of all those in which the group operates, they want to be employed. Although he likes Slovenia, he decided to go to Zagreb, because of lower taxes.”

During the discussion on free market, Solak reminded of the recent decision of the state-owned Telekom Slovenije to stop the sale of the TS Media company, for which the United Group made the largest offer.

“My company offered two million euros more than the next best bidder, and then a political decision stopped the sale. It is not a very attractive atmosphere and it doesn’t send a good message,” he stressed.

Meanwhile, the United Group has invested 1.5 billion euros in Greece, which will record 8 percent GDP growth this year, he noted and concluded:

“These are competing countries. If Slovenia does not wake up, all the money will go there. In all Balkan countries, the state apparatus is too large in terms of the size of the economy and population.”

Solak also said that when they invest in other countries, they mostly use the system and experiences from Slovenia.

They do business there, and their market is the whole world

Emil Tedeschi, founder and CEO of Atlantic Group, which took over the Droga Kolinska company more than a decade ago, agreed with the statements about excessive income taxes.

He illustrated that with a story about basketball players Jaki Blazic and Edo Muric, who play for the Cedevita Olimpija basketball club.

“Slovenia is probably one of the most expensive countries for professional athletes. As a result, you have a lot of good athletes who changed their place of residence and went to, for example, Monte Carlo. Life and play in Slovenia are ten times more expensive for them than in Serbia and five to seven times more expensive than in Monte Carlo. Incentives for employers would increase the competitiveness of the state.”

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