“We will abolish the super-gross salary, you will definitely see it in the paychecks. I think there is a need to reduce the tax burden on employees. It would be good to go back to the 15 percent that the ODS promised and then did not deliver. It would be important for people, they would see that they have no reason to be afraid of the future, “he said in a video posted on Facebook at 11:57.
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Hi people, I’m looking into a crystal ball ????
Hi people. I look at the crystal ball and see that I have to go on vacation. All my colleagues say that I am already unbearable and should drop out. I don’t know how they figured it out. So I’m going ???? This is the last report. And that ball is from Moser ????
Posted by Andrej Babiš on Saturday, August 1, 2020
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At present, a tax of 15 percent is paid on gross wages plus employer’s contributions to health and social insurance. Effective taxation is about 20.1 percent.
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In the program statement, the cabinet spoke of a rate of 19 percent of gross wages, in which case most people would improve by only a few hundred crowns. The Prime Minister indicated in an July interview for Právo that the state could be more generous. The proposed reduction is already significant, more than a quarter.
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According to the statement of the Minister of Finance Alena Schillerová (YES) for ČT, this proposal “gives logic”, but she also pointed out that it would have a significant impact on budget revenues. He estimated it at up to 90 billion crowns.
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Stanjura: He stole it from us, but maybe he won’t change his mind
ODS Deputy Chairman Zbyněk Stanjura supported the proposal. “For five years, Andrej Babiš rejected our proposal for a drastic tax reduction for employees. As is his custom, he stole the idea and today presented it as his own. It doesn’t matter, the result is important, so hopefully he won’t change his mind again, “he said.
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It only helps self-employed people, I would like the government to help employees as well
Minister of Labor and Social Affairs Jana Maláčová (CSSD)
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Two years ago, Babiš’s government took a negative stance on the ODS’s proposal to tax only gross wages. At that time, the Prime Minister argued precisely with significant impacts on the budget, then estimated at 75 billion crowns. Even so, the proposal has a great chance to pass in the House.
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“Only self-employed people are helped, I would like the government to help employees as well. We have an agreement that within a few weeks, the Minister (Schillerová) will propose the abolition of the super-gross wage, “said the Minister of Labor and Social Affairs Jana Maláčová (ČSSD) to ČT.
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So far, only the KSČM has spoken out against, and STAN also has some concerns about over-indebtedness. The pirates will wait for a specific proposal. They point out that the government has talked about the abolition of the super-gross wage several times and has always backed down.
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Economists are for
“This is a reasonable proposal, because the relatively high taxation of labor is one of the biggest mistakes of the domestic tax system. In the difficult times that the Czech economy is going through, it will give it the desired impetus, “Lukáš Kovanda, a member of the government’s National Economic Council, told Práva. “Unfortunately, as is customary with similar proposals, it is not clear where the government will actually take it. If they do not present adequate austerity measures to finance the tax reduction, there may be no tax reduction as a result, “he commented, adding that the debt incurred will eventually be paid again from taxes, although probably other than payroll tax.
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“Reducing taxes in a recession is a textbook and the right step. The state punishes employees the most for their work, and it is so perfectly fine that it wants to relieve them in particular. The proposal will improve each employee by an average of 21 thousand crowns a year, which is a significant amount that will be reflected in consumption, “agrees Roklen economist Dominik Stroukal.
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The budgetary impact might not be so great
“The state will get back VAT and other taxes on this money, so the impact on the budget may not be as great as the Minister of Finance states,” he added. According to him, the state could reduce taxation in a form other than just by abolishing the super-gross wage. It has its biggest advantage in that it clearly shows employees what the employer costs and how much the state will take on the way to their wallet. “They would achieve the same result if they reduced the personal income tax by less than four percentage points,” Stroukal added.
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The coalition wants to submit a proposal so that it can come into force as early as next year. The super-gross wage was introduced by the government of Mirek Topolánek (ODS) as part of the tax reform in 2008.
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| How much would the net wage increase by taxing 15% of the gross wage | |
| gross wage | increase in net wages |
| 16,000 CZK | 825 CZK |
| CZK 21,000 | 1 080 CZK |
| CZK 26,000 | 1 335 CZK |
| CZK 36,000 | 1 845 CZK |
| CZK 50,000 | 2 550 CZK |
| CZK 80,000 | 4 080 CZK |
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