The government’s package is criticized by the opposition, trade unions and entrepreneurs News

The changes in the government’s consolidation package target employees and their families as well as pensioners. The chairman of the Czech-Moravian Confederation of Trade Unions (ČMKOS) Josef Středula told journalists today. He criticized the union’s lack of details of the reform. He expects the government to discuss the proposal with the unions at the tripartite meeting on Monday. According to him, government officials do not communicate fairly with citizens.

“We haven’t heard a word about how the government will reduce inflation, the proposals that are being made will increase inflation,” Středula said. According to him, the reassignment of some items to a lower value added tax rate will not reduce prices for the final consumer. “This ‘deformation’ is running full steam ahead against employees and pensioners, absolutely unequivocally,” said the union leader.

According to him, the unions also do not agree with the proposal, according to which sickness insurance should be introduced for employees with a rate of 0.6 percent. “In the material, they argue that there was a reduction in sickness insurance contributions on the part of employers in connection with the cancellation of the waiting period, but the increase is now not going to the employers, but to the employees,” Středula said.

The cancellation of the exemption of non-monetary benefits to employees from taxes according to the Center will result in employers ceasing to provide them.

ANO criticizes government measures, pension proposals are not reform according to the movement

The first vice-chairman of the ANO opposition movement, Karel Havlíček, considers the presented government measures to be the execution of businessmen. According to him, the cabinet also “takes away” pensioners. The movement, on the other hand, agrees with higher taxation of vices or with the recognition of demanding professions. Havlíček wrote it for ČTK. According to the chairperson of the ANO parliamentary club, Alena Schillerová, the presented pension adjustment proposals cannot be called a reform, as there are no calculations, analyzes or legislative documents.

“It’s the execution of self-employed people. It is unacceptable to increase minimum social contributions by 70 percent, while another blow for some of them is an increase in VAT on services and crafts,” said Havlíček. According to him, businesses will be less competitive. “Higher income taxes will lead to more optimization and the reduction in compensation for the emission nonsense this government has promoted in the EU is also hard to believe,” he noted.

“VAT could have turned out worse, but I don’t understand the operation at all. Goods will not become cheaper, the state will lose units of billions. We agree with higher taxation of gambling, hard alcohol or tobacco. We also agree with the awarding of demanding professions,” added the former Minister of Transport and Industry and Trade.

A fundamental part of the state’s savings should be the limitation of subsidies. According to Schillerová, the question is where exactly the savings will be made, whether, for example, in education it will be investments in universities or the construction of schools and kindergartens, in transport for the construction of infrastructure or the repair of bridges and railways.

The government decided to cancel 22 tax exemptions. It proposes, among other things, to limit the tax discount for a husband or wife caring for a child up to the age of three only, or to cancel the kindergarten fee, i.e. the tax discount for placing a child in a preschool. According to Schillerová, under the previous ANO and ČSSD governments, exemptions worth 19.7 billion crowns were reduced, now it should be only 7.6 billion.

According to Schiller, the increase in corporate income tax from 2025 to 21 percent from the current 19 percent will not bring the state 22 billion crowns, as it assumes. According to the former finance minister, companies will change their behavior, start optimizing taxes, or some will change their headquarters. She also criticized the property tax increase.

With regard to the pension reform, Havlíček spoke of the “rip-off” of pensioners. Schiller believes that the proposal should not even be called a reform. She agrees with the retirement of people in demanding professions earlier, but according to her, there is no list of the industries in question.

The press conference of the coalition lasted about two and a half hours. According to Havlíček, she was a great shame. “An hour of whining about nothing and now everyone is looking for the essentials,” he said. “I am very disappointed by what I saw today. A very lengthy, shallow conference with a vague presentation, it was very difficult for us to get information,” added Schillerová.

Entrepreneurs: The measures in the package are ineffective or downright harmful

The Association of Small and Medium Enterprises considers the measures to restore public finances, which were presented by the government as part of the so-called consolidation package and which are also intended to affect small and medium-sized companies and self-employed, to be ineffective or directly harmful and undermining economic growth.

“In the proposals, we lack pro-growth measures and a real and fundamental simplification of the entire business environment, which every entrepreneur rightly assumes at the moment of increasing taxes and ‘tightening their belts’,” said the chairman of the board of the association, Josef Jaroš.

According to him, no one pays for self-employed people. “We reject the unsubstantiated information that self-employed people are ‘falling into’ the system of benefits and state support en masse due to low pensions,” he added to the proposed increase in levies for the self-employed.

The package is supposed to increase levies for self-employed people. Between 2024 and 2026, the minimum assessment base for social insurance will increase by five percentage points per year from the current 25 percent of the average wage. Self-employed people will also pay insurance premiums of at least 55 percent of the tax base instead of the current 50 percent. Entrepreneurs will thus pay an additional three billion crowns to the state next year, and another 4.5 billion crowns in 2025.

According to Jaroš, an increase in corporate income tax may bring increased state income in the short term, but in the long term, he considers it to be harmful and limiting economic growth and the competitiveness of companies. They are already burdened with huge labor costs and will now also face an increase in income tax, he pointed out.

According to him, neither the labor market nor the companies will benefit from further interventions in the agreements on the performance of work, the use of which is effectively eliminated by the prohibition of cumulation and the necessity of records. Entrepreneurs primarily expect an effort to simplify the labor law agenda, and not the eradication of all models outside of classic, and in the Czech Republic very expensive for employers, employment relationships, noted Jaroš.

The government’s consolidation package is supposed to reduce the state budget deficit by 94.1 billion crowns next year, and by another 53.4 billion crowns in 2025. It will bring an increase in corporate taxes, taxes on tobacco, alcohol and gambling or property taxes. Self-employed levies will also increase and the state will re-introduce health insurance for employees. The reduced value added tax (VAT) rates will be combined at 12 percent.

Source: Zprávy – by

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