The Bohemian-Moravian Trade Union Confederation (CMKOS), the largest umbrella organization of trade unions in the Czech Republic, has put forward a series of measures aimed at revitalizing the country’s public finances. The proposals, which include the reintroduction of the electronic sales registration (EET) system, were presented by union representatives at a press conference. However, the government has dismissed the suggestions as unrealistic and maintains its commitment to its own consolidation package.

According to CMKOS economists and confederation representatives, implementing the 12 proposed measures could result in savings of between CZK 151.5 billion and CZK 163.5 billion for the state. CMKOS economist Martin Fassmann emphasized that the aim was to provide an alternative to the government’s program, refuting the notion that there were no other solutions available.

Prime Minister Petr Fiala of the Civic Democratic Party (ODS) swiftly dismissed the trade unions’ proposals, labeling them as unrealistic and inadequate for achieving the necessary budget consolidation. Fiala reaffirmed the government’s commitment to its existing plans and expressed skepticism about the effectiveness of the proposed reintroduction of the EET system, which he believes would burden businesses without generating significant revenue.

CMKOS leader Josef Stredula highlighted the union’s concern that the burden of taxation predominantly falls on workers and pensioners, with the rich and entrepreneurs seemingly spared. Stredula argued that the government’s proposed austerity measures were unfairly shifting the tax burden onto workers.

Among the measures proposed by CMKOS is the relaunch of the EET system, including its third phase, which the unions estimate could generate CZK 20-25 billion. Other measures include abolishing the tax discount for part-time staff, adjusting flat expense write-offs, eliminating loss carryback provisions, and lifting the tax exemption for government bonds. Additionally, CMKOS suggests introducing a real estate transfer tax, lowering the limit for inheritance and gift taxes, increasing social insurance payments for sole traders and the self-employed, and raising the minimum wage to CZK 19,500.

The trade unions have raised concerns not only about the content of the government’s consolidation package but also about the lack of prior consultation. They argue that the cabinet provided them with insufficient time to review and provide comments on the extensive package, which comprises hundreds of pages. In response, the unions have threatened a general strike, with trade unionists from across the country set to meet in Prague on May 30 to decide on their next course of action.

As the government and trade unions remain at odds over the best approach to address the country’s public finances, the fate of the proposed measures and the potential for further labor disputes hang in the balance.

Article by Prague Forum