Republic of Slovenia

This paper argues that revenue-neutral tax rebalancing would help Slovenia address long-term fiscal and growth challenges. The present tax-benefit system is supportive of distributional fairness in Slovenia, but we argue that tax reform can help bring stronger employment and productivity growth and enhanced resilience to the challenges of population ageing. First, this paper lays out the case for tax reform in view of long-run fiscal and growth challenges; second, it reviews the current tax system and its weaknesses in comparison with international best practices; third, it sets out tax reform options; finally, it uses a model simulation to illustrate the medium- to long-term fiscal and growth impact.