Government to increase taxes to cover flood damage

Czech government, photo: CTK

The Czech government said it wanted to obtain money for financing repairs of flood damage by increasing indirect taxes, including the VAT and consumer tax on petrol, tobacco and alcohol.

Czech government, Photo: CTK
The Czech government said it wanted to obtain money for financing repairs of flood damage by increasing indirect taxes, including the VAT and consumer tax on petrol, tobacco and alcohol. It is also considering the introduction of a special tax rate for people whose income exceeds a million crowns a year. For comparison - the national average wage is less than 200,000 crowns. The new 37-percent rate would concern some 10,000 people. Economic experts say the amount of money collected that way would be absolutely insignificant and only drive companies to find other ways of rewarding their employees instead of paying them high wages. Many employees with high income may also be considering launching a private business and working freelance. Analysts therefore suggest that instead, cuts should be made in the overly generous social welfare system.