The flat tax should be composed of a minimum contribution to health insurance, an increased minimum contribution to social insurance and a symbolic tax of one hundred crowns. Next year, the payment should amount to 5740 crowns per month. Entrepreneurs would not have to communicate with the three authorities, file tax returns and further administration would be eliminated. Many of them should also save.
“There will also be no reason for most inspections from the tax office, as they will make no sense for a self-employed person registered for a flat tax,” said Minister of Finance Alena Schillerová (YES). The increased social security contribution insisted on by the Social Democrats will bring an additional 59 million crowns to the pension system. The government expects that out of approximately 800,000 self-employed persons, 140,000 of them could benefit from a flat tax.
Economist and head of the pension commission Danuše Nerudová criticizes the proposal. “An employee of one million a year pays 460 thousand crowns in tax and social and health insurance. A self-employed person from the million per year pays 68 thousand crowns when using the flat tax. This further opens up the disparity between how much employees and self-employed people pay, “said Nerudová, adding that relief for entrepreneurs prevents a greater discussion about the overall reduction of the tax burden on labor.
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Nerudová also agrees with the trade unions, according to which the flat tax set in this way is more advantageous for self-employed persons with higher incomes and not with lower ones, as the Ministry of Finance declares. Just as Nerudová calls for a reduction of the million limit, trade unions are talking about 750 thousand crowns, Nerudová is talking about the income limit of 600 thousand crowns.
In addition, trade unionists draw attention to the risk of further expansion of the Schwartz system, where people do not work for companies as employees, but as independent entrepreneurs due to lower contributions. “Every percentage of employees who move to the Schwartz system will fall into public budgets in the conditions of 2020 with a loss of about 7.7 billion crowns,” said economist Martin Fassmann from the Czech-Moravian Confederation of Trade Unions.
The Chamber of Commerce has long supported the introduction of a flat tax, just as the Ministry of Finance argues with less paperwork and the absence of controls from the tax office. He is not afraid that the Schwartz system may develop. “This may be more a consequence of the coronation crisis and subsequent redundancies and the need to reduce employers’ costs,” said chamber spokesman Miroslav Beneš. On the contrary, the chamber would increase the limit for the use of the flat tax.
The introduction of a flat tax is also supported, for example, by the opposition TOP 09. “However, voluntary entry into the system must be maintained, because not all entrepreneurs can pay a flat tax,” said party leader Markéta Pekarová Adamová. .
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