Lawmakers in the Czech Republic have recently given their approval to two laws that offer debtors the opportunity to eliminate their debts under favorable conditions. This initiative specifically applies to debts owed to the Czech Social Security Administration, Financial Administration, and Customs Administration. Municipalities are also eligible to participate in this iteration of the “merciful summer” program.

Under these new laws, debtors will only need to repay the principal debt, as the interest and penalties will be forgiven. It’s important to note that this relief applies to administrative executions conducted by the respective authorities and not those carried out by bailiffs.

Marek Výborný, a member of parliament representing municipalities, has encouraged all municipalities with a significant number of debtors to join this initiative. This includes outstanding debts related to dog fees, waste collection, and similar charges.

To take advantage of this opportunity, municipal councils must approve the relevant decree before the September 30 deadline. By doing so, debtors can benefit from favorable repayment terms for social security contributions and contributions to the state employment policy incurred prior to September 30 of the previous year. Once the debts are settled, individuals and companies will be exempt from penalties.

This program is expected to benefit over 700,000 individuals and more than 260,000 legal entities, as stated by Marian Jurečka, the Minister of Labor and Social Affairs. Debtors will have the option to repay the required amount in installments, providing additional flexibility in debt repayment.

In addition to social security, the merciful summer initiative extends to the customs and financial administration, enabling the forgiveness of interest and penalties on taxes and duties accumulated until the end of September of the previous year. However, debtors will still be responsible for repaying the principal debt, with installment options available.

The primary aim of this initiative is to alleviate the burden of long-standing debts, offering relief to debtors and streamlining the enforcement process for the authorities. By implementing the merciful summer program, the government hopes to provide a tax amnesty opportunity to tens of thousands of debtors, benefiting both individuals and the state.

While these laws still need to be approved by the Senate and signed by the president, their positive impact on debtors and creditors is expected to be substantial. Additionally, the Ministry of Health is working on a similar regulation to address debts in public health insurance, which is anticipated to come into effect in January.

Article by Prague Forum