Slovakia’s newly imposed transaction tax—deducting up to €40 per business bank payment—has triggered nationwide uproar among small and medium-sized enterprises, exposing cracks within the ruling coalition, fuelling public distrust, and prompting warnings of rising cash use, economic distortion, and political fallout; while government officials cite urgent fiscal consolidation needs stemming from a €24 billion debt, entrepreneurs face mounting daily losses, opposition parties demand repeal, and coalition partners now publicly disown a measure they themselves helped enact.
Firms Feel the Squeeze as Policy Hits Smallest Players Hardest
The recent introduction of Slovakia’s transaction tax has sparked a growing backlash among entrepreneurs, with small and medium-sized enterprises (SMEs) disproportionately affected by the new financial burden. The measure, which applies a levy of up to €40 per business bank transaction, is being condemned as a regressive step that penalises honest financial activity while placing strain on already tight profit margins.
Business owners report immediate losses, with some questioning the viability of continuing operations under the new regime. Patrik Mareček, a residential builder, recounted how his small firm paid €70 in tax on just a few invoices on the first day. “We cannot absorb this from our profits,” he explained, noting that, much like VAT, the cost is ultimately passed on to customers. Others, like Adrián Doboly—whose company manufactures cosmetics—estimate an annual tax burden of €4,000 to €5,000, adding that persistent increases in overheads and levies are making pricing ever more difficult to manage.
The consequences are especially severe for low-margin sectors and multi-stage production lines. Renáta Kiselicová, an analyst from the data platform Valida.sk, warned that in industries such as baking, where goods pass through several stages before reaching the consumer, every step is now taxed. For small producers, this could mean absorbing costs that cannot be recovered through pricing, potentially pushing them into loss. While larger corporations may be able to mitigate the impact due to transaction caps and scale, SMEs face a much sharper blow.
Adding to business frustration is the lack of transparency around the tax’s rollout. Entrepreneurs describe the experience as both sudden and disorienting, with bank notifications reflecting deductions for nearly every outgoing payment. These real-time reminders have fuelled discontent, especially as no targeted public information campaign accompanied the policy. For many, the measure appears to be a hasty attempt at fiscal consolidation with minimal regard for economic realities on the ground.
Coalition Turns on Itself as Political Fallout Escalates
Amid mounting anger from the business sector, the government is showing signs of strain. Despite voting for the tax in parliament, coalition parties are now scrambling to shift political responsibility. The Slovak National Party (SNS), a nationalist party currently part of the ruling coalition, claims to have supported the tax “with a heavy heart.” Roman Michelko, a member of parliament (MP) for SNS, suggested that the party leading the government—Smer-SD (Direction–Slovak Social Democracy), headed by Prime Minister Robert Fico—should shoulder the blame. “Everyone knows who pushed this through and why,” he stated. This strategic distancing is all the more striking given that SNS deputies endorsed the measure during its legislative passage.
Such contradictory messaging has exposed deepening rifts within the governing bloc. While the Ministry of Finance formally oversaw the policy’s implementation, coalition partners such as SNS and the centre-left party Hlas-SD (Voice–Social Democracy), led by former prime minister Peter Pellegrini, are increasingly portraying themselves as reluctant bystanders. This erosion of collective responsibility raises questions about the internal coherence of the government and its capacity to manage unpopular reforms.
Meanwhile, the opposition has seized the moment. Progressive Slovakia (PS), a liberal centrist opposition party, has submitted a parliamentary amendment seeking to repeal the tax altogether. Martin Dubéci, the party’s parliamentary group leader, reported an influx of complaints from business owners, calling the tax “insane.” His remarks reflect broader public sentiment, now surfacing across social media platforms, where business owners regularly share account screenshots displaying the new deductions.
The justifications offered by government representatives point to broader political dynamics. Tibor Gašpar, a high-ranking MP from Smer-SD and former police chief, argued that the tax is an unfortunate necessity, blaming past administrations—specifically those led by former prime ministers Igor Matovič and Eduard Heger—for creating the €24 billion public debt that now necessitates fiscal tightening. He maintains that the measure is expected to raise up to €700 million annually from corporate sources. Yet this explanation, grounded in blame-shifting, does little to defuse criticism over the tax’s design and implementation.
Experts also caution that the tax could backfire in unintended ways. By increasing costs on each digital transaction, the measure may incentivise a shift toward cash payments—thereby undermining financial transparency and increasing the risk of tax evasion. Such behavioural changes could undo years of progress in formalising Slovakia’s business sector.
Despite these concerns, some members of the coalition continue to defend the policy as a difficult but necessary step. Ján Blcháč, an MP from Hlas-SD, acknowledged its unpopularity but argued that the public now recognises the need for responsible budgeting. Pavel Ľupták, representing the extra-parliamentary conservative party Národná koalícia (National Coalition), urged critics to wait until year’s end before evaluating its effectiveness, comparing the situation to “clearing a clogged drain”—an unpleasant but necessary task.
Yet the political costs may already be mounting. The transaction tax has become more than just a fiscal tool; it has emerged as a litmus test of government transparency, cohesion, and responsiveness. With coalition members blaming each other, businesses demanding relief, and opposition forces circling, the issue threatens to destabilise the government’s credibility at a time when trust in public institutions is already fragile.
Source: Nina Janešíková | Denník N
