Finance Minister willing to consider progressive taxation on condition of unified VAT

Finance Minister Miroslav Kalousek, in an interview for the Friday edition of the daily Hospodářské noviny, said that he was willing to discuss introducing progressive taxation for a limited period of time on condition that junior coalition member Public Affairs support the introduction of a unified VAT rate of 19 percent. Previously, Public Affair’s leadership had said that unless income was taxed progressively, they were not willing to support this step, which would put a significant burden on middle-class taxpayers and low-income groups. This is the first time that the finance minister has publicly said he was willing to consider progressive taxation. However, he added that changing the income tax rate for higher-income groups was out of the question. Instead, he said, progressive taxation could be introduced by changing other parameters, such as tax breaks for lower income taxpayers.

Author: Jan Velinger