No more restrictions on flat expense write-offs by 2014

Prague, Jan 6 (CTK) - The Finance Ministry will not be pushing through more restrictions on flat expense write-offs for the self-employed until the end of the government's term in 2014, Finance Minister Miroslav Kalousek said on Czech Television (CT) Sunday.

In the discussion programme Questions of Vaclav Moravec, Kalousek said he would not do that because he "understands political reality."

According to him, it is correct that the self-employed should pay lower social insurance payments than employees since they get a much lower level of social protection from the state than employees.

He, however, pointed out that from a global point of view, self-employed people still enjoy above-standard benefits compared with employees in the Czech Republic in spite of the fact that the recently-approved government's tax package toughened rules for flat expense write-offs of the self-employed.

Kalousek said recently he considered this disproportion unsustainable in the long run.

Employee income tax revenues stood at Kc81.7bn last year, while individual income tax revenues based on tax returns amounted to Kc1.7bn.

The web server IHNED.CZ wrote on Saturday that Czech self-employed people with an annual income of Kc360,000 now pay slightly more than Kc45,000 in taxes and contributions, that is 12.6 percent of total income, while in Germany they would pay almost Kc160,000 or 44 percent of the income and in Hungary Kc193,000 or around 54 percent of gross income.

As for Czech employees, their situation is similar with those in the neighbouring countries. Employees with higher incomes pay more in Austria, Germany and Hungary.