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Monday | November 30 | 2020

Czech Parliament approved the largest income tax cut in decades

Czechia will cut the income tax next year, a measure that according to the Prague government would help the economy recover from the coronavirus recession, Bloomberg reports.

The Parliament approved a reduction in income tax proposed by billionaire Prime Minister Andrej Babis, who wants to extend incentives beyond current measures such as paying wages for temporarily laid off workers and subsidizing small businesses.

The Czech Ministry of Finance estimates that this change, which introduces a tax threshold of 15% for those on low incomes and one of 23% for those on high incomes, will reduce state revenues by about 80 billion kroner (3.6 billion dollars) next year, or 1.3% of GDP.

The plan was criticized by Central Bank Governor Jiri Rusnok, who said it would create a long term hole in public finances.

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