Prague – The President-elect of the Czech Republic, Petr Pavel, has stressed the need for pension and tax reforms to secure the future of the Czech economy. He stated that these reforms cannot be postponed any longer and that it is imperative to start explaining them to the public. He believes that the tax system should be reviewed by experts and a new setting should be prepared that would benefit the state treasury and have the least impact on the economy and citizens. The public should become familiar with the resulting model and specific proposals.

The Czech pension system is facing major issues as the country’s population is aging and the number of seniors is increasing. The current system is not sustainable, with income from levies not enough to cover expenses. The government is promising a reform to secure pensions for future pensioners, with plans to reduce the mandatory period of paying insurance premiums and raise the solidarity part of the pension. The government’s National Economic Council has also recommended limiting early retirements, slowing down valorization, and gradually increasing the retirement age.

In addition to pension reforms, the Czech tax mix is outdated and requires changes, according to some experts. The changes could concern, for example, property taxes. Pavel believes that the focus in the near future should be on managing the economic crisis in the Czech Republic and its regions, but that the promotion of reforms should be a long-term task. The Czech economy will not move forward without reform changes.

Article by Prague Forum