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Czech Prime Minister Bohuslav Sobotka has announced plans for more progressive corporate and personal income taxes if his party wins this year's parliamentary elections.
The tax plans of the ruling Czech Social Democrat Party (CSSD) were announced by Sobotka on February 21, and it is claimed that they will reduce the tax burden for 90 percent of salaried workers and 99 percent of small businesses.
At present, there is a single personal income tax rate of 15 percent on taxable income, although those earning more than 48 times the average annual salary pay an additional seven percent.
Under the CSSD's plans, four progressive income tax rates would be introduced: 12 percent on the first CZK30,000 (USD1,170) of monthly taxable income; 15 percent on CZK30,000 to CZK40,000; 25 percent on CZK40,000 to CZK50,000; and 32 percent on income exceeding CZK50,000.
It is unclear, however, whether the CSSD would retain the seven percent surtax under its plans.
For companies, the CSSD proposes to reduce the corporate income tax to 15 percent on income up to CZK5m per year, while the existing 19 percent rate would be payable on annual income of between CZK5m and CZK100m. A new higher rate of corporate tax of 24 percent would be introduced on income in excess of CZK100m.
The party claims that just 600 large companies would be liable to pay the proposed higher rate of corporate tax.
The proposals follow the party's recent announcement of its intention to introduce a special tax on banks of up to 0.4 percent of assets if it retains power in October's elections.
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