State budget

National budget of the year 2003

National budget of the year 2003 
Information about the 2003 national budget of the Slovak Republic
Annexes

National Council of the Slovak Republic
3rd Electoral Term

ACT
dated 11 December 2002 on the national budget of the year 2003

The National Council of the Slovak Republic has resolved on the following law:

Article 1

  1. Total revenue in the 2003 national budget is budgeted the sum of SKK 235 400 000 000, total expenditure in the 2003 national budget is determined in the sum of SKK 291 437 250 000. 
  2. The deficit of the 2003 national budget is determined in the sum of SKK 56 037 250 000. 
  3. The general revenue and expenditure review of the 2003 national budget is shown in Annex No. 1 .
  4. Allocation of budgeted revenues and expenditures to the individual budget chapters in the 2003 national budget is shown in Annexes No. 2 and 3. 
  5. Municipal budgets shall be subsidized from the 2003 national budget in the structure shown in Annex No. 4  and in the total sum of SKK 7 570 551 000, of which the sum of SKK 611 000 000 shall be used for executing self-government functions of municipalities with populations up to 3 000 permanent residents as at 31 December 2001 and in particular, for financing current expenditures in addition to wages, salaries, service emoluments and other personnel compensation.
  6. Budgets of higher territorial units shall be subsidized from the 2003 national budget in the structure shown in Annex No. 5  and in the total sum of SKK 7 992 250 000. 
  7. The review of binding limits of payments from the national budget in compensation of loss, parts of loss or other refunds to carriers providing for transportation of persons and for services in public interests on the basis of contracts for performances in public interests pursuant to separate legislation (Article 15 of Act No. 168/1996 Coll. of the National Council of the Slovak Republic on road transportation, as amended by Act No. 506/2002 Coll.) is shown in Annex No. 6 .
  8. Reserves in the national budget and targeted means of the individual budget chapters for the year 2003 are budgeted the total sum of SKK 113 162 938 000, itemized as shown in Annex No. 7 .

Article 2

  1. The government of the Slovak Republic (hereinafter referred to as “the Government”), or on its authority, the Minister of Finance of the Slovak Republic (hereinafter referred to as “the Minister of Finance”) may adapt the binding parameters of the 2003 national budget shown in Annexes No. 2 through 7. 
  2. Measures taken according to paragraph 1 may increase the total expenditure in the 2003 national budget, as specified in Article 1, paragraph 1, by 5 % at most, whereby the deficit of the 2003 national budget pursuant to Article 1, paragraph 2 shall not be increased.

Article 3

  1. The part amounting to SKK 7 801 000 000 of revenue from the individual income tax, levied on income from employment and perquisites thereof taxable under separate legislation (Article 13 of Act No. 366/1999 Coll. on income tax, as amended by Act No. 466/2000 Coll.) shall be provided in 2003 to municipal budgets.
  2. The amount of tax specified in paragraph 1, representing a revenue item of municipal budgets shall be distributed among municipalities proportionally to the numbers of their permanent residents as at 31 December 2001. 
  3. Revenue in the year 2003 
    1. from the corporate income tax levied on income taxable under separate legislation (Article 21 of Act No. 366/1999 Coll. on income tax, as amended by Act No. 437/2002 Coll.) shall be revenue of the national budget in the amount of 94.82 % and revenue of municipal budgets in the amount of 5.18 %,
    2. from the road tax, collected by tax offices whose territorial competence applies to the capital city of the Slovak Republic, Bratislava, shall be revenue of the national budget in the amount of 40 %, and revenue of the capital city of the Slovak Republic, Bratislava, in the amount of 60 %,
    3. from the road tax, collected by tax offices whose territorial competence applies to the city of Košice shall be revenue of the national budget in the amount of 40 %, and revenue of the city of Košice in the amount of 60 %,
    4. from the road tax, collected by tax offices whose territorial competence is not specified in subparagraphs b) and c) shall be revenue of the national budget in the amount of 60 %, and revenue of municipalities not specified in subparagraphs b) and c) in the amount of 40 %.
  4. Of the part of revenue from the corporate income tax payable by legal persons with domiciles on the territory of the Slovak Republic which, pursuant to paragraph 3, subparagraph a) represents a revenue item of municipal budgets, 60 % shall be distributed among municipalities proportionally to the numbers of their permanent residents as at 31 December 2001, and 40 % according to the domicile of the taxpayer. Part of revenue from the corporate income tax payable by legal persons with domiciles abroad shall be distributed among municipalities proportionally to the numbers of their permanent residents as at 31 December 2001.
  5. Part of the tax revenue which, according to paragraph 3, subparagraph d) represents a revenue item of municipal budgets shall be distributed among municipalities within the territorial area of the competent tax office, proportionally to the numbers of their permanent residents as at 31 December 2001.
  6. Tax offices shall allocate to municipalities the proportional parts of the individual income tax, tax levied on dependent activities and functional emoluments, and the applicable parts of revenue from the corporate income tax and road tax on a monthly basis, by methods specified in paragraphs 2, 4 and 5; the proportional part of the road tax pursuant to paragraph 3, subparagraphs b) and c) shall be allocated on the same basis to the capital city of the Slovak Republic, Bratislava, and to the city of Košice.
  7. Revenue from the real estate tax represents a revenue item of the administrator of this tax.
  8. Of the revenue from penalties levied by tax offices under separate legislation (Article 15 of Act No. 309/1993 Coll. of the National Council of the Slovak Republic on the consumption tax levied on wine, as amended by later legislation; Article 15 of Act No. 310/1993 Coll. of the National Council of the Slovak Republic on the consumption tax levied on beer, as amended by later legislation; Article 20 of Act No. 229/1995 Coll. of the National Council of the Slovak Republic on the consumption tax levied on alcohol, as amended by later legislation; Article 16 of Act No. 312/1993 Coll. of the National Council of the Slovak Republic on the consumption tax levied on tobacco and products made thereof, as amended by later legislation; Article 32, paragraph 12 of Act No. 239/2001Coll. on the consumption tax levied on mineral oils; Article 45 of Act No. 289/1995 Coll. of the National Council of the Slovak Republic on the value added tax, as amended by Act No. 60/1999 Coll.; Article 23a of Act No. 318/1992 (Digest) of the Slovak National Council on the inheritance tax, gift tax and the real estate transfer tax, as amended by Act No. 107/2002 Coll.; Article 55 of Act No. 366/1999 Coll., as amended by Act No. 561/2001 Coll.) , 50 % shall be a revenue item of the budget of the municipality having notified in writing the tax office that the tax regulations have been violated.

Article 4

  1. (1) The maximum sum of the bonus payable in 2003 by the state from resources within the national budget to building society members pursuant to separate legislation (Article 10 of Act No. 310/1992 (Digest) of the Slovak National Council on building society savings schemes, as amended by later legislation) is SKK 3 000. 
  2. (2) The state contribution pursuant to separate legislation (Article 84 of Act No. 483/2001 Coll. on banks and on amending and supplementing certain laws) applying to contracts concluded in the year 2003 shall be 2.5 % per year.

Article 5

The state shall, in 2003, pay health insurance premiums (Article 12, paragraph 8 of Act No. 273/1994 Coll. of the National Council of the Slovak Republic on health insurance, financing of health insurance, on establishing the General Health Insurance Institution and on establishing departmental, branch, corporate and civic health insurance companies, as amended by Act No. 374/1994 Coll. of the National Council of the Slovak Republic) from the budget chapter of the Ministry of Public Health of the Slovak Republic in the amount of 14 % of the base of assessment of SKK 2 890.

Article 6

The state shall, in 2003, pay insurance premiums (Article 15, paragraph 7 of Act No. 274/1994 Coll. of the National Council of the Slovak Republic on the Social Insurance Institution, as amended by later legislation) from the budget chapter of the Ministry of Labour, Social Affairs and Family of the Slovak Republic for/

  1. sickness insurance in the amount of 4.8 % of the base of assessment of SKK 2 430,
  2. pension insurance in the amount of 28 % of the base of assessment of SKK 5 410 pursuant to separate legislation (Article 14, paragraph 9 of Act No. 274/1994 Coll. of the National Council of the Slovak Republic, as amended by later legislation) ,
  3. pension insurance in the amount of 28 % out of 45 % of the base of assessment of SKK 5 000 to the special account of the Ministry of Defence of the Slovak Republic pursuant to separate legislation (Article 51 of Act No. 274/1994 Coll. of the National Council of the Slovak Republic, as amended by later legislation).

Article 7

The National Labour Office shall, in 2003, pay insurance premiums for

  1. health insurance (Article 12, paragraph 9 of Act No. 273/1994 Coll. of the National Council of the Slovak Republic, as amended by later legislation) in the amount of 14 % of the base of assessment of SKK 3 830,
  2. sickness insurance (Article 15, paragraph 8 of Act No. 274/1994 Coll. of the National Council of the Slovak Republic, as amended by later legislation) in the amount of 4.8 % of the base of assessment of SKK 2 700,
  3. pension insurance (Article 15, paragraph 8 of Act No. 274/1994 Coll. of the National Council of the Slovak Republic, as amended by later legislation) in the amount of 28 % of the base of assessment of SKK 2 700.

Article 8

  1. The volume of state liabilities relating to instalments in repaying the principal sums of the national debt in the year 2003 is SKK 145 664 000 000; a review of these liabilities and the sources of their financing in 2003 is shown in Annex No. 8 .
  2. The Government is empowered to decide on issuing government notes (Article 2, paragraph 2 of Act No. 386/2002 Coll. on the national debt and state guaranties, and amending and supplementing Act No. 291/2002 Coll. on the Treasury and on amending and supplementing certain laws) in 2003 and on using state financial assets up to the sum of SKK 145 664 000 000 for repayment of the principal sum of the national debt remaining from preceding years in instalments due in 2003. 
  3. The Government is empowered to accept the following credits in 2003/
    1. from the European Investment Bank for financing the construction of highways and motorways up to the sum of SKK 2  850 000 000,
    2. from the European Investment Bank for financing the construction of highways within the ISPA projects up to the sum of SKK 1 660 000 000,
    3. from the World Bank for financing modernization of the health care system up to the sum of SKK 3 600 000 000,
    4. Credits not accepted by the Government in 2002 pursuant to separate legislation (Article 11 of Act No. 586/2001 Coll. on the national budget of the year 2002).
  4. The Government is empowered in 2003 to use sources acquired from credits accepted until the end of 2002, and from credits accepted under this Act/
    1. from the World Bank for financing the social benefit management project up to the sum of SKK 173 100 000,
    2. from the World Bank for financial coverage of revenues from government notes, issued for restructuring of selected banks pursuant to separate legislation (Article 117 of Act No. 483/2001 Coll.) up to the sum of SKK 2 900 000 000,
    3. from the World Bank for financial coverage of liabilities arising from governmental guaranties provided under separate legislation (Article 117 of Act No. 483/2001 Coll.) up to the sum of SKK 2 900 000 000,
    4. from the World Bank for financing the public finance management project, including the advance payment required for its preparation within the Ministry of Finance of the Slovak Republic budget chapter up to the sum of SKK 54 000 000,
    5. from the World Bank for financing the health care system modernization project up to the sum of SKK 364 000 000,
    6. from the European Investment Bank for financing the 4th Slovakia - European Roads project up to the sum of SKK 750 000 000,
    7. from the European Investment Bank for financing the construction of highways within the ISPA projects up to the sum of SKK 267 000 000,
    8. from the European Investment Bank for financing the 5th Slovakia - European Roads project up to the sum of SKK 300 000 000,
    9. from the Council of Europe Development Bank for financing the requirements of cultural development up to the sum of SKK 62 150 000,
    10. from the Council of Europe Development Bank for financing the infrastructure of social service homes up to the sum of SKK 137 600 000,
    11. from the Council of Europe Development Bank for the project of primary schools for Romany children in Sečovce and Košice up to the sum of SKK 2 100 000,
    12. from the Japanese Bank for International Cooperation for financing the 3rd Slovakia - European Roads project up to the sum of SKK 1 200 000 000.
  5. The disproportion between the national budget revenue and expenditure may be covered in the course of the year 2003 from sources acquired by sales of government notes (Article 2, paragraph 2 of Act No. 386/2002 Coll. on the national debt and state guaranties, and amending and supplementing Act No. 291/2002 Coll. on the Treasury and on amending and supplementing certain laws) and from credits accepted.

Article 9

  1. The salary tariff grades pursuant to separate legislation (Article 105 of Act No. 312/2001 Coll. on state service and on amending and supplementing certain laws; Article 131, paragraph 2 of Act No. 315/2001 Coll. on the fire and rescue brigade) in the year 2003 shall increase by 0 %.
  2. The service emoluments of members of the police force, of the Slovak Information Service, of the Corps of Prison Wardens and Judicial Guards of the Slovak Republic, of the Railway Police, of the National Security Office and of customs officials (Article 85, paragraph 5 of ct No. 73/1998 Coll. on state service of members of the police force, of the Slovak Information Service, of the Corps of Prison Wardens and Judicial Guards of the Slovak Republic and of the Railway Police, as amended by Act No. 659/2002 Coll.; Article 80, paragraph 5 of Act No. 200/1998 Coll. on state service of customs officials and on amending and supplementing certain laws, as amended by Act No. 664/2002 Coll.) in the year 2003 shall increase by 0 %.
  3. The service emoluments of professional soldiers (Article 7, paragraph 1 of Act No. 380/1997 Coll. on financial perquisites of soldiers, as amended by Act No. 661/2002 Coll.) in the year 2003 shall increase by 0 %.
  4. The salary of a National Council of the Slovak Republic Deputy (Article 29d, paragraph 2 of Act No. 120/1993 Coll. of the National Council of the Slovak Republic on salaries of certain constitutional officials of the Slovak Republic, as amended by Act No. 668/2002 Coll.) in the year 2003 shall increase by 0 %.
  5. The base salary of a judge (Article 18 of Act No. 670/2002 Coll. on salaries of judges in the year 2003 and on amending Act No. 385/2000 Coll. on judges and lay judges, and on amending and supplementing certain laws, as amended by Act No. 185/2002 Coll.) in the calendar year 2003 shall be valorised at 0 %.
  6. The percentage used in calculating the additional service emoluments of professional soldiers (Article 30, paragraph 1 of Act No. 380/1997 Coll.) in the year 2003 is determined at 100 %.
  7. The coefficient used in multiplying the non-taxable part of the tax base pursuant to separate legislation (Article 12, paragraph 2, subparagraph a) of Act No. 366/1999 Coll., as amended by later legislation) in the year 2003 is determined at 1.

Article 10

  1. Unless specified differently by separate legislation, the binding parameters applying to the transferred execution of competencies of state administration to municipalities and higher territorial units, and to the transfer of competencies from state administration bodies to municipal and higher territorial unit self-governments pursuant to separate legislation (Act No. 416/2001 Coll. on the transfer of certain competencies from state administration bodies to municipalities and higher territorial units, as amended by later legislation) shall be adjusted in 2003 in accordance with Article 2 within the individual budget categories, based on delimitation protocols mutually agreed upon between state administration bodies and territorial self-governments. The Ministry of Finance of the Slovak Republic shall provide the respective municipality and higher territorial unit with a subsidy corresponding to the amount of delimited financial sources, unless specified differently by separate legislation.
  2. The competent tax offices shall, until 31 March 2003, balance with the individual municipalities any excess payments and arrears that occurred in the year 2002 in the course of implementation of separate legislation (Article 4 of Act No. 586/2001 Coll.) .

Article 11

This Act shall assume effect on the 1st January 2003.

Information about the 2003 national budget of the Slovak Republic

I. Macro-economic starting points in the 2003 national budget construction
II. Quantification of essential budgetary relationships
III. Budgeting of the national budget revenue
IV. Budgeting of the national budget expenditures
V. Budgeting of selected expenditure titles from a cross-sectional aspect

The government, while preparing the national budget of the year 2003, focused its attention to the substantial clarification of budgetary relationships and to their harmonisation with internationally accepted methodologies. Its intents in the budgeting of revenues and expenditures have been based upon concrete legislative measures.
The resulting draft national budget is more transparent compared to the previous years, has a higher informative value and created a much stricter budget environment. The budget brings pressure to bear upon the individual departments toward realisation of reforms. Also, mainly in the revenue part, it substantially approximated the European Union conditions. Changed procedures of quantifying the fundamental budgetary relationships introduced the transition to gradual implementation of the ESA 95 methodology as the official methodology of the European Union. In the ESA 95 conditions the public budget deficit represents SKK 57.5bn, or 4.97 % of the expected GDP value.

I. Macro-economic starting points in the 2003 national budget construction The following points of origin were set in the quantification of main budgetary links of the national budget:

Nominal GDP, current prices SKK 1 155.4 billion
GDP growth rate, constant prices 3.7 %
Annual average rate of inflation 8.8 %
Rate of registered unemployment 18.0 %

Quantitative estimates of the macro-economic indicators took in account recent developments in the economy, as well as the assumed changes in the development of both external and internal economic conditions, specifically:

  • Moderate revival in the economies of important trading partners of Slovakia and increased real growth of foreign demand;
  • Reduction of the deficit of public finance in 2003 relatively to the GDP, compared to the expected actual position in 2002, and its further gradual decrease to below 3 % GDP in the target year 2006;
  • Adjustment of the rates of indirect taxes presented in the draft national budget, adjustment of regulated prices with the subsequent increase of the average annual inflation rate to 8.8 %;
  • Enactment of legislation required to implement the 2003 expenditure policy so that expenditures would consider the expected development of revenues as well as the plans for gradual consolidation of public finance;
  • Relatively stable exchange rate development, moderate decrease of interest rates, relatively stable development of the prices of oil and energy raw materials.

II. Quantification of essential budgetary relationships

1. The 2003 national budget revenue is quantified at SKK 235.4bn. This, in comparison with 2002, is an increased by SKK 15.5bn. Tax revenue, increasing by SKK 34.9bn (19.3 %) is the main item, responsible for the growth. Contributions of proposed legislative measures amounting to SKK 11.4bn are incorporated in the expected revenue.
2. The 2003 national budget expenditure is quantified at SKK 291.4bn. In 2002 it had been budgeted the level SKK 273.4bn (including the restructuring of banks in the volume of SKK 15.5bn). Based on recent legislative measures the national budget expenditure was reduced by more than SKK 16bn , additional savings were realised mainly through strict budgeting of facultative expenditures.
3. The national budget deficit represents SKK 56.0bn. This quantification includes the bank restructuring cost, amounting to SKK 10.7bn.

III. Budgeting of the national budget revenue

III.1 Tax revenues
III.2 Non-tax revenue
III.3 Grants and transfers
III.4 Revenue from repayment of credits and loans, and from sales of ownership interest

Total revenue in the 2003 national budget is estimated at SKK 235. 4bn, taking the developments in the key revenue categories in account. This is a growth by SKK 15.5bn, in absolute numbers, from the approved 2002 budget.
The national budget revenue assessment is based on the estimated values of macro-economic indicators in the year 2003, on the approved amendments of tax legislation, tax performance developments in 2002, statistical data on employment, and on the estimated development of the average monthly wage.
Revenue from the corporate income tax is budgeted under consideration of the performance of advances and payments of the tax over the preceding years, as well as of the assumption of a dynamically growing profit rate in the business sector during this year and the following one. The estimates took mainly the expected profit of companies influenced by the adjustments of regulated prices in account.

The outcome of the following legislative amendments have been incorporated in the present quantification of the national budget revenue:

  • Amendment of the VAT Act (increase of the lower rate from 10 % to 14 %, reduction of the base rate from 23 % to 20 %), expected contribution: SKK 8.3bn,
  • Amendment of the laws on the consumption tax on mineral oils, tobacco and products made thereof, expected contribution: SKK 3.1bn . The increased rate of the tax on oil applies to automobile fuel (petrol and Diesel). Increased consumption tax levied on tobacco and products made thereof applies to short cigarettes in 2003. 

III. 1 Tax revenues

The estimated sum of tax revenues is SKK 215.6bn . This represents a SKK 34.9bn growth from the 2002 budget.
ncome, profit and capital tax is budgeted SKK 73.4bn. This category includes the individual income tax (levied on income from employment and perquisites thereof, from business and other independent earning activities), corporate income tax and withholding tax.
Total revenue, based on the individual income tax from employment and perquisites thereof, is estimated at SKK 35.5bn. This exceeds the 2002 budgeted value by SKK 4.9bn. Being a proportional tax, SKK 27.7bn thereof should be allocated to the national budget and SKK 7.8bn to municipalities. Thereby the latter increased their proportional ratio by SKK 501 million from the preceding year.

Revenue from the individual income tax levied on business and other independent earning activities is budgeted SKK 5.7bn.
The estimated value of the revenue from the corporate income tax is SKK 30.9bn. This is an absolute increase by SKK 6.6bn from last year. SKK 29.3bn (94.82 %) should be allocated to the national budget, and SKK 1.6bn (5.18 %) to municipalities.
The estimated value of the withholding tax is SKK 10.7bn. The tax, showing moderate growth, is levied on interest, revenues from accounts, shares, participation and deposit certificates, as well as from bonds.

Tax on property, including the inheritance tax, gift tax and real estate transfer tax is budgeted SKK 1.3bn.
The largest proportion in the total tax revenue is represented by domestic taxes on goods and services.
The value added tax is budgeted SKK 99.4bn, increasing by SKK 17.4bn from the approved 2002 budget volume.
The total volume of excise taxes is estimated at SKK 36.2bn. This is a SKK 5.3bn growth from the approved 2002 budget.
The individual excise taxes types are quantified as follows:

Mineral oil SKK 21.5bn
Alcohol SKK 4.75bn
Beer SKK 1.85bn
Wine SKK 0.30bn
Tobacco and products made there of SKK 7.80bn

The taxes levied on use of goods and licensed activities are budgeted SKK 1.6bn. They include the road tax (SKK 1.6bn) and the mining duty (SKK 5 million). The total estimated amount of the road tax is SKK 2.5bn. As this is a proportional tax, SKK 0.9bn thereof will be allocated to municipalities.
The budgeted volume of tax revenue from international trade and transactions is SKK 3.7bn. This estimate took in account the general reduction of customs tariffs for selected goods, based on the results of the GATT Uruguay Round, as well as the implementation of preferential tariffs derived from international agreements on free trade zones, concluded in connection with integration of the Slovak Republic with the European structures.

III.2 Non-tax revenue
The budgeted total of non-tax revenue is SKK 12.0bn, i.e. less by SKK 16.3bn in comparison with the 2002 budget.
The quantification of non-tax revenue in the year 2003 is based on the approved 2002 budget level, reduced by transfers of residual profit to NBS (SKK 4.7bn), capital gains - sale of Hotel Forum (SKK 1.0bn), budget category revenues delimited to higher territorial units and to municipalities (approx. SKK 725 million), sale of licences (SKK 4.5bn) and dividends (SKK 2.8bn).
The main volume of this revenue is represented by administrative and other charges and payments , budgeted the sum of SKK 7.1bn. They include: administrative charges, fines and penalties, dues exacted for non-industrial and random sales, and further administrative and other dues and fees.
Other non-tax revenue, representing refunds of national budget sources used or retained without authority, and other revenue is budgeted the sum of SKK 3.6bn.

III.3 Grants and transfers
The budgeted value of dividends in 2003 is SKK 4.0bn. Most of this sum should be acquired from the ownership interest of the state in SPP, a. s..

III.4 Revenue from repayment of credits and loans, and from sales of ownership interest
Revenue from repayment of credits and loans, and from sales of ownership interest are budgeted the 3.8bn SKK level. This includes instalments of returnable financial assistance, payable by health insurance companies in the total sum of SKK 2.2bn, revenue from the discontinued state funds of the Ministry of Environment and Ministry of Agriculture budget categories, amounting to SKK 800.0 million, and repayment of principal sums and interest on realised state guaranties in the sum of SKK 800.0 million.
IV. Budgeting of the national budget expenditures IV.1 Current expenditure
IV.2 Capital expenditure
IV.3 providing credits and loans, ownership interest and repayments of the principal

Expenditures are budgeted the SKK 291.4bn level in 2003. In the year 2002 they were budgeted SKK 257.9bn (SKK 273.4bn, when including the expenditures for restructuring of the banking sector). Expenditures will grow by SKK 18.0bn from 2002. 
The key expenditure items are quantified as follows:

IV.1 Current expenditure
Wages, salaries, service emoluments and other personnel compensation are budgeted the SKK 34.0bn level in 2003. 
The budgeted total of insurance premiums and employer contributions to insurance companies and to the National Labour Office is SKK 12.1bn. Most categories budgets them at 37.75 % of the budgeted payroll volume. Those categories where the average wage per employee exceeds the legal base of assessment shall budget at a lower percentage.
Goods and other services are budgeted SKK 32.0bn. This expenditure decreased from 2002 by SKK 2.2bn in absolute numbers, consequently to jurisdictional delimitations from regional offices to higher territorial units and municipalities, to changes in the status of public universities, and to the new science and technology financing model, which resulted in budgeting of these expenditures as transfers.

Current transfers
Current transfers for payments of insurance premiums on behalf of statutory groups of persons by the state are budgeted SKK 25.0bn, increasing from 2002 by SKK 2.0bn.

Social benefits are budgeted the SKK 16.4bn level. The increase from 2002 represents SKK 2.4bn.
State social benefits and social care benefits are budgeted 2003 in the total sum of SKK 17.0bn (their budgeted level in 2002 was SKK 16.0bn).

Subsidies to non-financial entities are budgeted SKK 17.1bn, excluding subsidies within the summary financial relations with municipalities and higher territorial units.

Summary financial relations with municipalities and higher territorial units
Financial relations between the national budget and municipalities / higher territorial units are budgeted in the total volume of SKK 15.6bn , of which SKK 12.1bn are current transfers and SKK 3.5bn capital transfers.
Municipalities participate in the above sum with SKK 7.6bn , of which SKK 5.2bn are proposed to finance relevant tasks from current transfers, and SKK 2.4bn from capital transfers. The proportion of higher territorial units represents SKK 8.0bn, of which SKK 6.9bn are proposed from current transfers and SKK 1.1bn from capital transfers.

Repayment of interest and other payments linked to credits - they represent expenditure in the National Debt budget category, budgeted 2003 at SKK 34.9bn.

IV.2 Capital expenditure
The total proposed capital expenditure is SKK 32.5bn, of that SKK 19.4bn in expenditures of budget authorities (capital assets), SKK 9.6bn in transfers to spending units, municipalities, higher territorial units and public organisations, and SKK 3.5bn to non-financial/business entities.

IV.3 Expenditures for providing credits and loans, ownership interest and repayments of the principal are budgeted SKK 5.4bn.
V. Budgeting of selected expenditure titles from a cross-sectional aspect V.1 Expenditures for science and technology
V.2 Budgeting of sources providing for activities drawing on pre-access funds
V.3 Expenditures for defense purposes
V.4 Expenditures for house-building programmes
V.5 Expenditures for road construction projects
V.6 Expenditures for public universities

V.1 Expenditures for science and technology - in accordance with the state scientific and technological policy concept these expenditures are increased from SKK 3.6bn in 2002 (0.33 % GDP) to SKK 4.2bn in 2003 (0.36 % GDP).

V.2 Budgeting of sources providing for activities drawing on pre-access funds

The ISPA, SAPARD and PHARE programmes are structural policy instruments applying to the pre-access period, designated to assist candidate countries in their preparation for full EU membership.

In the case of realising all projects planned for 2003 the Slovak Republic should have sources from the EU pre-access funds available in the sum of SKK 7.9bn, itemised as follows:

ISPA SKK 2.1bn
SAPARD SKK 2.3bn
PHARE SKK 3.4bn

Co-financing of expenditures of the Slovak Republic is provided for with SKK 4.5bn in the draft 2003 national budget (thereby remaining principally at the 2002 level) within the General Treasury budget category. Thus, the budget categories participating in the sources from the EU pre-access funds and in expenditures designated for co-financing within the General Treasury budget category will have funds available that exceed the budgeted limits by SKK 12.4bn.

V.3 Expenditures for defense purposes are budgeted in the volume of SKK 21.7bn, which is a growth by SKK 1.8bn from 2002, maintaining an unchanged ratio of expenditures for the SR armed forces in the GDP.

V .4 Expenditures for house-building programmes in 2003 are budgeted SKK 7 375.0 million.

V.5 Expenditures for road construction projects will be covered from credits (government credits, state-guaranteed credits, government bonds) in 2003; means from the national budget will be used to gradually repay principal sums and interest on such credits. Of the total of these sources motorway construction projects will absorb SKK 8.5bn, construction and reconstruction of other roads SKK 1.2bn, road maintenance and repair SKK 2.3bn.

V.6 Expenditures for public universities within the jurisdiction of the Ministry of Education are budgeted for the first time since their transformation to public universities.
Presently, 19 public universities with 20 306 employees (of whom 9 286 are internal educators) have 131 088 students (92 140 of whom in daytime courses). Current transfers required for this educating programme are budgeted in the volume of SKK 7.3bn (exceeding the 2002 level by SKK 860.6 million).
Expenditures required for financing additional 4 state (i. e. not public) universities will be budgeted within the applicable departments (Ministry of Interior, Ministry of Defense and Ministry of Public Health).