Consolidation package

The government would like to approve the consolidation package in the legislative version by the end of June, so that negotiations in the Chamber of Deputies can start before the parliamentary holidays. All the measures reducing the state budget deficit would come into force as early as on 1 January 2024.

The draft law primarily regulates the following areas:

VAT - for example, the number of VAT rates should be reduced to the basic 21% and reduced 12% instead of the 3 current rates.

Excise duty – excise duties on alcohol and tobacco products should increase by 10% next year, and by an additional 5% each year between 2025 and 2027.

Personal income tax – e.g., lowering the threshold for applying the tax rate of 23%, tightening the conditions for the discount on the spouse, cancelling the discount on student and school fees, abolishing the exemption of non-monetary benefits provided for culture, education, the acquisition of health services, recreation and tours, etc.

Corporate income tax – e.g., an increase in the rate of income tax to 21% from the current 19%, introduction of entry price limit for category M1 vehicles…

In addition, the tax on gambling and real estate taxes should be increased.

We will continue to monitor the process for approving the bill and keep you informed. 

Article prepared by: Martina Farářová