Jurecka Says It Would Be Appropriate To Raise Corporate Taxes

Czechia's Labour and Social Affairts Minister Marian Jurecka told Lidovky.cz that it would be appropriate to raise the corporate income tax (CIT) as the government is trying to find CZK70bn in savings.

• Jurecka said that the potential increase in the tax for businesses would be a fair solution after the state rolled out generous subsidies for the private sector amid the COVID-19 pandemic and the subsequent energy crisis.
• The government is working on an austerity package that would allow it to rein in public spending. Representatives of parties forming the ruling coalition met this week again to discuss various proposed solutions.
• The CNB yesterday warned that too loose fiscal policy is a key hawkish risk to its interest-rate outlook. A failure to present a credible fiscal consolidation package could force the central bank to tighten monetary settings.
• CNB Deputy Governor Eva Zamrazilova provided more details yesterday evening, noting that the structure of the austerity package will matter. Tax hikes could have a pro-inflationary effect, while cutting state subsidies could be anti-inflationary.