Prague, April 19 (CTK) – The Czech opposition Civic Democratic Party (ODS) wants to lower taxes so that employees would newly pay a 15 percent tax from their gross salary instead of the super gross salary, thanks to which their net income would rise by 7 percent, party leader Petr Fiala told CTK on Wednesday.
The party will approve its election manifesto at its conference on Saturday.
The election to the Chamber of Deputies will be held on October 20-21.
The ODS also plans other changes in the tax system.
It wants to cancel the solidarity surcharge, paid by the people with a monthly gross salary over 100,000 crowns, to renew the cap payment to the health insurance system on the level of four times the average salary and to lower compulsory levies on the salaries covered by employers by 2 percentage points.
“The economy is doing well, but we are still among the countries with the biggest tax burden and the highest price of work,” Fiala said.
“This is why we want to insist on an average 7 percent rise in employees’ net salaries,” he added.
“This can be achieved by the introduction of a 15 percent tax on the gross salary, not on the super gross salary as now,” Fiala said.
The super gross salary is the gross salary plus the compulsory insurance paid by the employer.
The ODS leaders estimate that due to the change, the state budget would lose some 40 billion crowns.
The lower compulsory levies on employees’ salaries would cost another 26-28 billion crowns.
The shortfall in the budget may be made up by more targeted welfare benefits and cuts in subsidies, Zbynek Stanjura, chairman of the ODS deputies group, said.
“Welfare benefits are being collected by those who absolutely do not deserve them, only abusing them,” Stanjura said.
“Besides, there is number of absurd and dubious subsidies whose volume exceeds 120 billion a year,” he added.
Stanjura said they should be lowered by 20 percent.
“If we adopt a responsible approach to the financial management, no major shortfalls will occur due to the changes we are proposing,” Stanjura said.
Changes in taxation are also being planned by other parties. Opposition TOP 09 leader Miroslav Kalousek wants the lowering of the social insurance by 8 percentage points to be included in the party manifesto. Under his proposal, it is to fall by four percentage points for both the employees and employers.
“We must solve the high levies on work radically, not only cosmetically,” Kalousek said.
He said thanks to this, net salaries and competitiveness of firms would immediately rise.
Kalousek said he would cover the shortfall in the pension account by a permanent use of 30 percent of the collected VAT.