Social Democrats remain firmly opposed to government’s tax reform bill

The Social Democrats, the junior party in the ruling coalition, have said they will not support a bill on tax reform approved by the Senate with certain modifications on Thursday. Party leader Jan Hamáček, said the country could not afford the tax cuts proposed by the ruling ANO party in view of the burden of the coronavirus pandemic. He said the modification made by the Senate would increase state expenditures even further. However, the bill, which will now go back to the lower house, has enough support in the Chamber of Deputies to pass without support from the Social Democrats.

Senators voted on Thursday evening to increase tax payers’ flat tax-deduction sum in the following two years, each time by CZK 3,000, though that figure is lower than the one MPs approved. In addition municipalities and regions should receive compensation of 80 percent toward future fall-offs in revenues; this will stem from the abolition of the “super gross” salary and a cut in the income tax level, which will fall to 15 percent (top earners will pay 23 percent).