- Hans Weber
- December 1, 2023
Czech Finance Minister Confirms No Additional Budget Package; Tax Changes Only Once Per Election Term
Finance Minister Zbynek Stanjura (ODS) announced that the Czech government does not intend to prepare another package to balance the public budget. This declaration came after a meeting with President Petr Pavel, where they discussed the government’s consolidation package currently under debate in the Chamber of Deputies. Stanjura emphasized that one of his pre-election promises was that tax changes would occur only once per election term.
While President Pavel did not explicitly state whether he would sign the government’s consolidation package, Stanjura indicated that the package met the president’s demands. After the meeting, President Pavel took to Twitter, expressing his approval of the government’s efforts to consolidate public finances. He described the draft state budget for the next year as realistic and balanced.
The consolidation package, primarily comprising tax adjustments, is in its final stages of deliberation in the lower house and is expected to be put to a vote next week. According to the Finance Ministry, the measures within the package, combined with cuts in state subsidies, are projected to improve the state budget balance by approximately CZK 97 billion in the next year. However, due to increased expenditures in other areas, the budget deficit will not be fully reduced by this amount.
Minister Stanjura emphasized that this was the last major legislative package planned by the current government. He reiterated the government’s commitment to changing taxes only once in a term, as outlined during their election campaign.
Stanjura also pointed out that the president had two key conditions for the package’s acceptance: reducing the growth of state debt and ensuring social sustainability. He expressed confidence that the president would consider these conditions when making a decision, though the final decision would come after votes in the Chamber of Deputies and the Senate.
During the meeting, Stanjura briefed President Pavel on the draft state budget for the next year, recently approved by the government and sent to the lower house. The minister considered it important for the president to be acquainted with the budget before parliamentary debates begin.
President Pavel, in his Twitter statement, appreciated the government’s efforts toward consolidation and described the draft budget as realistic and balanced. However, he raised concerns about certain aspects, such as uncertain estimates of windfall tax revenues, funding for the State Transport Infrastructure Fund, transparency of the government sector’s balance, and the basis for a CZK 19 billion increase in expected tax revenues. He commended Minister Stanjura for seeking clarification on these issues before the budget’s approval in the Chamber of Deputies.
Article by Prague Forum