Consolidation package passed in the Parliament

The Chamber of Deputies approved the consolidation package bill in its third reading. The measures included in the package are to reduce budget deficits by a total of CZK 150 billion over the next two years. The proposal will now be debated by the Senate of the Czech Republic so that the measures from a total of 63 amendments can enter into force as early as 1 January 2024.

The measures on both the expenditure and revenue sides of the state budget will reduce the budget deficit by CZK 97.7 billion in 2024 and CZK 53 billion in 2025. The government will reduce spending on state operations, including the volume of salaries for civil servants, reduce the volume of national subsidies, but maintain investment activity and social spending. On the revenue side, the number of VAT rates will fall from three to two, 22 tax exemptions will be abolished or, for example, corporate income tax, real estate tax or tax on gambling and addictive substances harmful to health will rise.

In the third reading, members of the Parliament adopted a total of three amendments to the original draft recovery package and then approved the bill as a whole. Most of the changes were contained in the government coalition's omnibus amendment, which, for example, allows companies to keep their bookkeeping in a foreign currency, leaves 100% of real estate tax revenues to municipalities, regulates the taxation of gambling machines and the redistribution of revenues from this tax between municipalities and the state, simplifies the registration of work performance agreements or limits the amount of employee benefits exempt from personal income tax.

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