National Budget Council calls for fiscal prudence

The National Budget Council has said the planned increase in pensions and the abolition of the “super gross” wage, which would significantly lower taxes, is imprudent without a clear plan regarding how the government will replace the drop in state revenues. The Council has advised the government to debate such steps only after it has a medium-term strategy on consolidating the country’s finances, which it is due to present to the lower house of Parliament by September 30.

Prime Minister Andrej Babiš of ANO has pushed for the ending of the super-gross wage and the reduction of personal income tax to 15 percent. The government also wants to increase pensions by 900 crowns a month next year. The ruling ANO and Social Democrats say that investments in people and projects are the only sensible way to jump-start the economy hit by the coronavirus crisis. However the two parties do not agree on all aspects of the planned reforms.