The President of the Republic Miloš Zeman spoke out against the abolition of the super-gross wage on Sunday. “What worries me is the attempt to break a hole in the state budget with such concessions that would be permanent, that is, that would be repeated every year. An example is the considered 15% income tax rate, “he said in the program Partie televize Prima.
One week ago, the Governor of the Czech National Bank, Jiří Rusnok, also spoke out against the same intention. The National Budget Council and some economists are also critical. According to them, this threatens the development and sustainability of public finances.
At the end of August, the government coalition agreed to abolish the super-gross wage and introduce two personal income tax rates: the basic 15 percent and for monthly incomes over 140 thousand crowns 23 percent. Effective taxation for employees now stands at 20.1 percent. The coalition now wants to present the plan to the Chamber of Deputies and manage the whole process so that everything starts to apply from January 2021.
The estimate from the resulting loss of income varies greatly, but ranges from 70 billion crowns upwards. Of this, about 20 billion for municipal budgets, the rest for the state budget.
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“I am in favor of progressive taxation, which, by the way, is in the vast majority of European Union countries. And when there will be no more progressive taxation, let it be at least the nineteen percent rate, “said the President of the Republic in the program Partie televize Prima.
“If we went to the 19 percent, we would also increase taxes on self-employed people at the same time, and we basically don’t want that,” said the Prime Minister and Chairman of the ANO movement, Andrej Babiš.
Exceptions would be teachers
“The introduction of a 15 percent rate represents an increase of seven percent gross, five percent net. And I believe that at a time when we are really in an unprecedented economic crisis, that is sufficient wage growth in the public sector, “said Schiller.
The Minister therefore proposes to freeze the gross salaries of civil servants, including police officers and firefighters, next year. The exception should be teachers, to whom the government intends to add about nine percent next year, regardless of tax cuts. And so that their average salaries reach 45 thousand crowns gross.
The minister’s plan is supported by the right-wing opposition and the Pirates. On the contrary, some unions or communists criticize the plan. The coalition partner, the CSSD, has not yet expressed its opinion. “Until we talk about it with YES, I will not comment on it,” said the Minister of Labor and Social Affairs and Vice-President of the CSSD Jana Maláčová.
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When the public sphere clashes with the private
“The notion of wage freezing will have a very negative effect on all current and possibly future employees of any state office,” said Věra Prokopová, an employee of the Labor Office and a member of the Trade Union of State Bodies and Organizations. Even if her net salary would increase by 1,600 after the abolition of the super-gross wage (she now takes 32 thousand crowns gross).
But Schiller disagrees. He argues that due to the planned lower taxes, net salaries will increase sufficiently for civil servants. That is why it is also planning to freeze gross wages for police officers, firefighters, customs officers and other parts of the armed forces.
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Trade unionist Prokopová also argues that if the state wants to manage the republic well, it must have quality institutions with quality employees and must be able to appreciate those quality employees.
On the contrary, Schiller recalls that the average salary in the state sphere is higher today than in the private sphere. “We also need to take into account how wages in the private sector will grow. So we cannot continue to widen the gap between the private and public sectors. “
However, civil servants demand that the government increase their gross salaries by at least another seven percent, regardless of the amount of taxes.
As House politicians see it
Schiller’s support is supported by Jan Skopeček, ODS deputy chairman of the ODS parliamentary club. “I agree with the Minister of Finance on this, because the moment the super-gross wage is abolished, it will mean an increase in the income of all employees, including the state ones.”
Tomio Okamura, the chairman of the SPD movement and the deputy chairman of the Chamber of Deputies, says that it is important to use the current crisis to ensure that wages in the state administration copy wages in the private sphere, and this is no different.
On the contrary, the Communists, who tolerate the government, agree with the unions. They demand that the state increase the gross salaries of civil servants by at least three percent in 2021. “It would be fair for employees to take inflation into account,” said Miloslava Vostrá (KSČM), chairwoman of the budget committee.
The chairman of KDU-ČSL Marian Jurečka also believes that the increase in salaries should cover inflation, “because at that moment we could affect families, single mothers”.
The tripartite (government, employers and trade union representatives) will discuss the salaries of police officers, firefighters, officials and other civil servants next year at the Office of the Government (government, employers and trade unionists) on 21 September. The government will have the final say. It should decide in October.
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