Slovakia - Politics, government, and taxation

Slovakia is a parliamentary democracy with a directly-elected president. A unicameral (one-house) National Council of 150 members is elected via a proportional system in which voters indicate a preference for parties rather than for specific candidates. Each party that receives at least 5 percent of the vote is assigned a number of seats in parliament according to the percentage of ballots it receives. Terms are for 4 years. Judicial power is vested in a Supreme Court, elected by the National Council and a Constitutional Court appointed by the president from nominees approved by the National Council.

Although the president was initially elected by the parliament, the office of president has been chosen by direct election since 1999. The 1st president to be chosen by direct election, Rudolf Schuster, was elected in 1999 for a 5-year term. He succeeded Michal Kovac, who served as the 1st president after being elected by the parliament in 1993.

The 1st elections in the independent Republic of Slovakia took place in 1994. At that time, the Movement for a Democratic Slovakia (HZDS) emerged as a clear victor, as it had in 1992. This party, which is a weak supporter of free-market reforms, formed a governing coalition with the xenophobic (anti-foreign involvement) Slovak Nationalists (SNS) and the Slovak Workers (ZRS). In spite of a very slight victory for the HZDS in the 1998 elections, the party's inability to form a governing coalition gave power to a broad-based coalition that included the free-market reformist Slovak Democratic Coalition (SDK). Other significant political parties include the Slovak Communist Party (KSS) and the reformist Democratic Union (DU). There is also a new, centrist party called Smer (Direction).

The government has played a significant role in the economy during the process of changing from a centrally planned communist system to a market-based system. The HZDS-SNS government in power from 1994 to 1998 not only slowed economic reforms but also did some damage to the privatization process by selling direct shares of state industries instead of distributing shares through a voucher process (in which all citizens obtained vouchers to purchase shares in formerly state-run industries), as had been initiated under the Czechoslovak state. It had originally been intended that these sales would take place via public auction, but the HZDS-SNS government made the transfers independently of public discussion or knowledge. There have been allegations that the transfer of many of these enterprises occurred under dubious circumstances, especially between 1996 and 1998.

In spite of these setbacks, the economy is currently dominated by private activity, and the vast majority of economic activity originates in the private sector . The reformist government that took power in 1998 has actively attempted to implement numerous reforms at a rapid pace, with the goal of having Slovakia enter the European Union in the near future.

The Slovak Republic adopted the Commercial Code that was initially formulated in 1991 under the Czechoslovak state. It outlines legal protections for private property and business activities for both Slovaks and foreign persons. Government reforms have also stabilized the Slovak currency and made it convertible to other currencies on the world market. The government has effectively reoriented trade towards Western partners in an attempt to integrate with EU markets.

The government obtains revenue through several different forms of taxes. There is a progressive personal income tax with 7 rates that ranges from 12 to 42 percent. The corporate income tax is 29 percent, although tax holidays or specific tax breaks for some businesses are offered as part of an effort to attract foreign investment. Other taxes include property taxes, road taxes for business vehicles, inheritance tax, and fees for administrative services. There is also a value-added tax on goods; excise taxes on alcohol, tobacco, and some fuels; customs duties ; and real-property transfer taxes. The court system enforces the commercial code, but as it is often overloaded, plaintiffs may experience significant delays. The military has little or no role in controlling economic development, except for the armaments industry.

Communications
Country	Newspapers	Radios	TV Sets a	Cable subscribers a	Mobile Phones a	Fax Machines a	Personal Computers a	Internet Hosts b	Internet Users b
	1996	1997	1998	1998	1998	1998	1998	1999	1999
Slovakia	185	580	402	105.1	87	10.0	65.1	38.79	600
United States	215	2,146	847	244.3	256	78.4	458.6	1,508.77	74,100
Germany	311	948	580	214.5	170	73.1	304.7	173.96	14,400
Czech Republic	254	803	447	77.1	94	10.4	97.3	85.58	700
a Data are from International Telecommunication Union, World Telecommunication Development Report 1999 and are per 1,000 people.
b Data are from the Internet Software Consortium ( http://www.isc.org ) and are per 10,000 people.
SOURCE: World Bank. World Development Indicators 2000.