Press conference at which the government presented the consolidation package and the proposal for reform changes to pensions, May 11, 2023, Prague. Minister of Finance Zbyněk Stanjura (ODS).
A selection of highlights of the government's consolidation package:
– The government's consolidation package is supposed to reduce the deficit by 94.1 billion crowns next year, by another 53.4 billion crowns in 2025, i.e. by 147.5 billion crowns in total. It aims to reduce the public finance deficit from this year's 3.5 percent of GDP to an estimated 1.8 percent of GDP in 2024 and 1.2 percent of GDP in 2025.
Expenditures are to fall by 78.3 billion crowns within two years (62.4 billion in 2024 and 15.9 billion in 2025)
– national subsidy titles especially for entrepreneurs (54.4 billion crowns): industry and trade (20 billion crowns), agriculture (10.2 billion crowns), transport (6 billion crowns), local development (2.8 billion crowns), education (two billion crowns, others (13.4 billion crowns)
– savings for the operation of the state (11.2 billion crowns)
– reduction in the volume of salaries in the public sector (9, 7 billion crowns)
– other expenses (three billion crowns)
On the revenue side, it will occur in the years 2024- 2025 to total savings of 69.2 billion crowns (31.7 billion in 2024 and 37.5 billion in 2025)
– increase in corporate income tax to 21 percent from the current 19 percent (22 billion crowns) from 2025
– increase in self-employed taxes (7.5 billion crowns)
– re-introduction health insurance for employees in the amount of 0.6 percent (13 billion crowns)
– increase in real estate tax (9.3 billion crowns)
– increase in consumption taxes on tobacco products ( 5.9 billion crowns) and alcohol (1.1 billion crowns) and gambling taxes (3.9 billion crowns)
– cancellation of 22 tax exemptions (7.6 billion crowns)
– personal income tax adjustment (2.7 billion crowns)
– levies from the agreement on the performance of work (two billion crowns)
– other income (minus 1, 7 billion crowns)
– value added tax will have two rates. The existing reduced rates of ten and 15 percent will be combined to 12 percent. The basic 21 percent rate will remain. For example, VAT on food, housing and medical products is reduced from 15 to 12 percent. The income component shows the amount for this revision of VAT rates minus 4.1 billion crowns.