Czech Prime Minister Petr Fiala.
Prague – Despite the complex budget situation and the need to fight the deficits left by the former government of Andrej Babiš (ANO), the current coalition government does not want to increase the tax burden on citizens. This was stated by Prime Minister Petr Fiala (ODS) in response to a written interpellation by Alena Schillerová (ANO), the former Minister of Finance in Babiš's government. The chairwoman of the opposition club ANO Schillerová asked him whether the government coalition was preparing to increase taxes, because the intention to introduce a so-called tax brake was dropped from the government's updated program statement from this March.
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Coalition leaders discussed six dozen measures to consolidate public finances on Wednesday, but they did not conclude the negotiations and will continue them next week. The coalition wants to present specific measures by mid-May. The consolidation package should reduce the structural deficit by about a percent of GDP, i.e. by about 70 billion crowns.
The tax brake is supposed to represent the upper limit of the composite tax quota. Once it is reached, the state will no longer be able to raise taxes. “Given that the updated program statement from March 2023 no longer contains the rule of the tax brake, I ask you to confirm my assumption that this means that the coalition is planning a drastic increase in the tax burden in the Czech Republic,” Schillerová wrote.
Fiala replied that the intention to introduce a debt brake was dropped from the updated program statement due to the need to introduce this measure as a constitutional law. But the government coalition does not have enough votes for that, because the constitutional majority in the House of Representatives is 120 MPs, and the government clubs have only 108 MPs. According to Fiala, an agreement with the opposition, including the ANO movement, is impossible. According to him, the impossibility of such an agreement is proved by the course of most meetings of the House.
In another of the interpellations, Schiller asks the Prime Minister to clarify his real intentions towards increasing the levy burden on self-employed people. He appeals to him to abandon this intention. It states that the Czech Republic is one of the few countries that have fallen into recession and recalls the January drop in retail sales by 7.7 percent. “In this situation, your government intends to prescribe dramatic cuts to the Czech economy on the income and expenditure side, without in any way supporting investments and economic performance and growth, which represents future tax revenues,” writes Schillerová in her interpellation.
“I agree with you that the overall economic situation is not easy,” replied Fiala. However, he pointed out that from the second quarter of this year, the estimates assume a renewed growth of the economy and that the quarter-on-quarter decline of the economy in the last quarter of last year corresponded to the development in Germany. According to data from the Czech Statistical Office, gross domestic product fell by 0.4 percent in the last quarter of last year compared to the third quarter.
“I am pleased with your newly acquired concern for self-employed people and small entrepreneurs, which is extremely surprising when looking back at your steps during the government of the ANO movement,” Prime Minister Fiala wrote. “I believe that you will remain interested in this in the future,” he added.
In his reply, which arrived in the House of Representatives on April 12, the Prime Minister states that the specific measures of the pension reform and the consolidation package are still being discussed within the government coalition and then the coalition will discuss them with the opposition and social partners. “The levies of self-employed persons are undoubtedly among the analyzed measures. The reason is mainly the low pensions of these persons, which results in their greater use of the social system in their senior years. If some of the analyzed measures are adopted, their aim will be precisely to increase the retirement pensions of the self-employed (persons self-employed),” reads the answer.
Hospodářské noviny wrote on April 12 that the Ministry of Labor plans to gradually increase pension insurance premiums for self-employed people. Their monthly levy should increase by about 600 crowns every year. The measure should primarily concern self-employed persons paying the minimum social insurance.
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