Former Czech president joins critics in slamming Fiala’s austerity package

FILE - Former President of the Czech Republic Miloš Zeman addresses the media in Vienna, Austria, June 10, 2021. (AP Photo/Lisa Leutner, File)
By Thomas Brooke
3 Min Read

Former Czech President Miloš Zeman has weighed into the political storm brewing over Prime Minister Petr Fiala’s tax hikes, claiming the proposed measures will not have the desired economic effect and will only cause greater misery to the Czech population.

Zeman, who only stepped down from his presidential role in March, offered his thoughts on the government tax reforms in a social media post on Wednesday.

“I consider the government’s proposal for consolidation measures to be a disjointed patchwork of more than 50 ideas, the common denominator of which is that their economic effect will be lower than expected and citizen dissatisfaction higher than expected,” he wrote.

The former Czech head of state, while dismissing some of the policies as ineffective, did offer an indication of what he would do if he were in charge.

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“I propose in the long term that the corporate income tax be returned to its original value and that the taxpayer discount be canceled as part of the cancellation of tax exemptions. Even these proposals are painful, but they would lead to the elimination of the structural deficit of the state budget.”

Zeman joins a list of critics ranging from trade unions to the opposition leader, Andrej Babiš, who earlier this week vowed to repeal all the proposed tax increases should he return to office.

Despite continuously promising not to implement austerity measures in order to reduce Czechia’s national debt, Fiala has proceeded with controversial tax hikes including an increase to the minimum levies for self-employed persons, a hike in the corporate income tax from 19 to 21 percent, and a fiscal attack on those earning more than three times the Czech average wage.

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The government plans will see the abolition of 22 existing tax exemptions including the current student tax discount, an increase in insurance payments for the self-employed, and an increase in alcohol and tobacco taxes.

The move sparked outrage among trade union leaders this week, with Josef Středula, chairman of the ČMKOS trade union, demanding a debate on the plans and refusing to rule out a strike action.

On Tuesday, the ČMKOS trade union published the results of a survey that showed the average Czech family will have between 17 and 20 percent less disposable income per year after the introduction of the government measures.

“We stand by the decision on strike readiness. No one discussed those measures with us. On Thursday, we learned that most of the government’s measures concern employees, and on Sunday, that they will not be discussed with us, that approval by the Chamber of Deputies is just a formality. We perceive the impacts very strongly,” he told journalists.

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