Czech government plans lump-sum tax for self-employed

The government intends to introduce a lump-sum tax for self-employed earning up to CZK1m a year, according to an agreement between ANO and the CSSD, which FinMin Alena Schillerova announced late on Tuesday (Oct 8). The idea is to put a lump sum for the entire tax burden, including personal income tax, as well as pension and health insurance contributions. At this point, the tax amount is intended to be around CZK5,500, with more details to be available next week, when the finance ministry is expected to make an official proposal. Schillerova already has a meeting with coalition partner scheduled for next Monday (Oct 14), when specifics are going to be discussed. The CZK5,500 amount currently breaks down to about CZK100 in personal income tax, CZK2,500 in health insurance contributions and CZK2,900 in pension contributions. The finance ministry’s idea is to make payment of taxes and social & health insurance contributions easier, reducing red tape for self-employed.

Ruling coalition partners also discussed possible changes to pensions, particularly for those with lower incomes or who were in disadvantaged situation, like single mothers, for instance. There was also an agreement to look into ways to enforce payment of alimony, which has often been difficult to secure. However, discussions didn’t go too far, because several ANO ministers requested more in-depth calculations from the labor ministry, which labor minister Jana Malacova (CSSD) didn’t provide at the meeting. PM Andrej Babis didn’t wish to comment any ideas, given that there has been no detailed proposal made yet. However, ANO and the CSSD will continue discussing these issues next week, when better-prepared ideas should be on the agenda.

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