Supreme Audit Office: Czech Republic losing billions in grey economy

The Supreme Audit Office says the Czech Republic is losing tens of billions of crowns due to illegal employment practices, where employers fail to pay taxes and mandatory contributions to health and social insurance. An audit which reviewed how government institutions share data relevant for back-tax assessments, revealed that public authorities often failed to exchange necessary information within required timeframes. Agencies did not recalculate mandatory insurance payments for employers fined for illegally hiring foreign workers, and the Ministry of Finance neglected to reclaim health insurance overpayments made on behalf of illegal job seekers.

The Supreme Audit Office estimates that the state may have lost approximately CZK 92 billion in unpaid income taxes and insurance contributions between 2019 and 2023.