The share of regions in tax collection will increase

The share of regions in the collection of shared taxes will increase to 10.26 percent in the next three years from the current 9.76 percent. In addition, starting next year, Prague should receive an additional share of 0.1 percent from the collection of these taxes.

The division concerns the collection of value added tax (VAT) and personal and corporate income tax. The proposal is based on a majority agreement in the Association of Regions of the Czech Republic, it still has to be approved by the Parliament. According to Finance Minister Zbyňek Stanjura (ODS), the change means an improvement over the current system, which has been in effect for the past two decades without change.

The counties will get more money, Stanjura suggested. But the populous ones will lose

Economy

In addition to increasing the regions’ share of shared taxes, the amendment also deals with the distribution of money between individual regions. The Moravian-Silesian and Ústí Regions and Prague criticized the method of division in particular.

The new model will take into account the number of residents, students and pupils at school facilities, the number of municipalities in the region, emergency income in hospitals established by the region, the length of roads II. and III. classes and the like.

Overall, the regions will improve at the expense of the state coffers, even though they manage record surpluses and have a total of around one hundred billion crowns in their accounts. The governors themselves appealed to the government that the current tax distribution system is outdated and does not reflect the specifics of the regions. Regions with a high population such as Prague, the Ústecký Region and the Moravian-Silesian Region will get worse. However, Prague will partially compensate for the loss with the aforementioned increase of one tenth of a percent.