Tax Changes Approved in Czech Republic

November 7, 2012 Taxation in Czech Republic

Petru Ne?asuPRAGUE – The Czech Republic has overcome ongoing political hurdles and infighting in parliament to clear the way for tax hikes and further austerity measures.

Months of tense political debate came to a head in the Czech Republic on November 7th when a proposal to implement a package of tax hikes which will raise revenues by CZK 22 billion was approved by the lower house of the national parliament.

Following the vote, the government will now submit a revised budget which details the implementation of a hike to the rate of the VAT by 1 percent.
Also, during the same parliamentary sessions the rate of personal income tax for individual earning more than CZK 4 000 per month was increased by 7 percent.

The increase to taxes are intended to be part of the government’s ongoing austerity measures, and were passed with support from just 101 members of the parliament, with 99 votes being cast against the plan or abstaining.

Explaining the significance of the results of the vote in parliament, the Prime Minister of the Czaech Republic Petr Necas said “…this is one of the votes that confirms confidence in the government and allows it to set a state budget that respects a deficit below 3 percent of GDP and that also includes pro-growth measures.”

Photo by Valsts kanceleja