Friday, 17 May 2019

OECD recommends Prague to link retirement age to life expectancy

17 July 2018

Prague, July 16 (CTK) - The Czech Republic should connect the retirement age level with life expectancy, the Organisation for Economic Cooperation and Development (OECD) recommends in its report that its Secretary-General Angel Gurria presented in Prague on Monday.

The organisation also recommends that Prague support the employment of women with children and change the tax burden structure.

The OECD report says the Czech Republic faces the population ageing. To cope with its economic impact, the country should lift the maximum retirement age, which is 65 years for men and women now, and instead to link the retirement age to the expected development of life expectancy.

However, the OECD had already recommended that the Czech Republic raise the retirement age two years ago, along with securing more sources to fund pensions.

The latests report says only a limited progress has been achieved in the solution to the pension system.

The OECD also points out that the share of employed women is decreasing after they have children, which deepens a gender income gap.

This is why the OECD advises to lower the maximum possible length of parental leave and create incentives for men to use a part of parental leave to a higher extent.

The state should also support flexible jobs and home offices and secure a broader and financially accessible offer of childcare facilities, the OECD adds.

The organisation also recommends changes in the Czech tax system.

It points out that the tax burden in the Czech Republic is the sixth highest out of the OECD states and that the Czech budget revenues to a large extent depend on the collection of social insurance payments.

Prague should modify its system of taxes and other obligatory payments to lower social insurance and increase indirect taxes, such as VAT and green taxes. The introduction of the latter taxes, for instance on carbon emissions, is an important step in support of green technologies.

The OECD recommended s carbon emission tax to the Czech Republic two years ago and now it states that the country has made no progress since then.

The OECD, founded in 1961, associates 35 highly advanced countries. The Czech Republic joined it in 1995. Its mission is to boost the economic growth, harmonise development aid, raise employment and living standards and expand trade, but also to suppress discriminatory practices.

The OECD regularly prepares reports assessing the situation of its member countries. It issued its previous survey of the Czech Republic in 2016.

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