Tax for the President

Government spending is being cut in the Czech Republic

The Czech government appears to have listened to criticism from the opposition, which claims that the government's measures to save public funds will mainly affect ordinary citizens. From January next year, the salary of the country's President Vaclav Klaus, amounting to about 10.3 thousand dollars per month, will be reduced by 5% and taxed at 15%. Approximately the same amount allocated to Klaus as allowances and compensation will be subject to taxation. As a result, the president's net monthly income will be less by 16.5%, or approximately $3.3 thousand. According to the Czech newspaper Gospodarske Noviny, this is the largest reduction in government payments to a Czech politician since the Velvet Revolution of 1989 year. “We are just canceling the tax breaks that the president had,” explained Finance Minister Miroslav Kalousek.

President Klaus admitted that in the current difficult financial situation, measures to cut costs are inevitable, noting that out of the country's 10.5 million people, he will suffer the greatest financial losses. Regarding the upcoming reduction in expenses for the activities of the presidential office, Klaus noted that this structure cannot be accused of wastefulness: “Compared to the departments of some other presidents in neighboring countries, my office looks very, very modest.”

The government wants to save over $105 million from the state treasury. The policy of total austerity announced by the cabinet in order to reduce the state budget deficit will force the wallets of all government officials in the country, including those who have retired from active politics, to lose weight. Thus, after taxation of the amount of about 5.2 thousand dollars that is paid monthly to former President Vaclav Havel, his net income will decrease by almost $800 per month. The chairman of the lower house of parliament will receive 7.2% less from January, and an ordinary deputy - by 9-10%. The least financial losses await the government members themselves. The net monthly earnings of Prime Minister Petr Necas in 2011 will be 6.5 thousand dollars, the earnings of ministers will be 4.7 thousand (they will be lower by 6.5 and 6.7%, respectively).

A much more noticeable blow to the pocket awaits public sector workers, whose earnings next year should decrease by 10% (the average salary of a Czech civil servant is about 1.3 thousand dollars). Ministries themselves must decide exactly how to achieve the necessary cost savings - by cutting salaries or laying off staff. In response, following the Czech-Moravian Confederation of Trade Unions, police officers and firefighters threatened to protest against wage cuts. Even the clergy, whose earnings are planned to be cut by 5-10%, are expressing dissatisfaction (a significant share of the church budget comes from subsidies from the Ministry of Culture). Church workers emphasize that their incomes are much lower than the national average.

Meanwhile, unplanned governments have become an additional argument in support of austerity policies. Recently, the cabinet allocated more than $20 million for priority measures to eliminate the consequences of massive floods that swept through the north of the country in early August and claimed five lives.

Victor PRUSAKOV, Prague