The Slovak government has approved a pre-election budget for 2027 without the promised repeal of the controversial financial transaction tax. Why did the government change its position, how much revenue will this generate for the treasury, and where will these billions of state funds go? Here are the key details.
Finance Minister Ladislav Kamenický officially announced the decision to maintain the tax on businesses until at least 2028. Prime Minister Robert Fico also confirmed this position, even though the government had promised businesses relief as recently as late summer.
A Change in Stance: Why the Transaction Tax Remains
The financial transaction tax has become one of the most contentious issues in the Slovak economy since its introduction on April 1, 2025, as part of a state budget consolidation package.
Back in August, Robert Fico publicly stated his intention to abolish this tax as of January 1, 2027, citing a wave of criticism from the business community. However, government officials have now acknowledged that the budget cannot afford to lose half a billion euros ahead of the parliamentary elections.
“This is, of course, a pre-election budget, but at the same time, it is a budget that will not raise taxes or contributions in Slovakia,” explained Finance Minister Ladislav Kamenický.
The tax repeal has been postponed until January 2028—meaning that the resulting revenue shortfall of approximately €500 million per year will fall on the shoulders of the new government, which will be formed following the 2027 elections.
Who is subject to the tax and what rates apply
As a reminder, as of January 1, 2026, sole proprietors (živnostníci) have been fully exempted from paying the transaction tax. For all other companies, the following rules remain in effect:
0.4% for each non-cash bank transaction (maximum fee of €40);
0.8% of the amount for cash withdrawals at an ATM or bank teller window (no upper limit);
€2 per year for using a payment card.
Despite the concessions for živnostníci, representatives of small and medium-sized businesses continue to emphasize that the fee creates additional administrative barriers and drains working capital.
2027 Budget: €7.5 billion deficit, 13th-month pensions, and a new nuclear power plant
The draft state budget for 2027 projects a deficit of 7.5 billion euros (4.94% of GDP). Total state revenues are expected to amount to €63.3 billion, while expenditures are projected at €70.8 billion.
The government justifies maintaining the transaction tax by citing the need to fund social commitments and infrastructure projects. Specifically, the budget allocates:
€916 million for the payment of 13th-month pensions;
€700 million for the construction, renovation, and equipping of hospitals;
€250 million — to continue energy subsidies for the population;
Measures to support families, combat drought, and prepare for the construction of new nuclear power plant units in Jaslovské Bohunice.
According to the Ministry of Finance’s forecasts, Slovakia’s public debt will rise from 63.4% of GDP in 2026 to 66.3% of GDP in 2027. At the same time, economic growth is expected to accelerate to 1.8%, and inflation is expected to decline to 2.9%.
