After the implementation of nine major tax changes in the government package, the average household in the Czech Republic is projected to experience a yearly loss of CZK 7,614, according to an analysis conducted by the Research Institute of Labour and Social Affairs (RILSA). Among different household groups, seniors would be least affected, while families with children would face the greatest impact. The introduction of sickness levies for employees would generate the highest revenue for the state. The analysis considered various factors such as income, risk of poverty, and homeownership status for different household types, including seniors, singles, and families with or without children. The analysis did not account for other tax changes and adjustments.
The RILSA analysis evaluated individual measures, including changes in VAT rates, sickness levies, income tax progression, levies on sole traders and property, abolition of school fees, limitation of spouse discounts, and taxes on alcohol and tobacco. According to the analysis, an average household would incur costs of CZK 2,723 for health insurance, CZK 2,233 in trade taxes, CZK 431 in higher property tax, CZK 264 in alcohol tax, CZK 403 in tobacco tax, and CZK 465 due to tax progression. However, they would save CZK 205 due to the VAT change. The abolition of school fees would result in a loss of CZK 832, and the limitation of the spouse discount would lead to a loss of CZK 467. Overall, the total impact would amount to CZK 7,614.
The analysis indicates that higher-earning individuals would contribute more to the state due to the increased levies. Middle-income families would feel the effects of the spouse discount limitation and the abolition of school fees the most. RILSA stated that the impact of these measures on Czech households appeared to be relatively proportional when considering their disposable income.
The analysis also provided specific figures for different household types. Seniors living alone would experience a yearly loss of CZK 990, while a single working-age person would have CZK 4,881 less. A childless couple would face a reduction of CZK 11,509, and a couple with at least one retired member would be impacted by CZK 2,521. Families with one, two, or three or more children would experience losses of CZK 11,874, CZK 15,846, and CZK 18,881, respectively. Incomplete families with one child would have CZK 6,138 less, and those with two or more children would face a decrease of CZK 4,987.
According to RILSA, the nine tax measures would result in a gain of CZK 33.64 billion for the state, while the Finance Ministry estimated CZK 27.5 billion. The majority of this revenue would come from employees, with health insurance contributing approximately CZK 12.23 billion.
