Self-employed targeted in tax and levy reform
The government’s plan to shake up the tax and levies system has now taken on a final shape, but it is a shape that will not please a lot of people, especially the self-employed.
The coalition agreed on the new system at its meeting on Monday, but it might be held to ransom from those in its ranks once again as it tries to push the revision through parliament with its slim majority. This time the grievance comes from the OKS faction of Most-Hid, which is made up of just four MPs, but that is enough to block the vote in parliament.
The OKS MPs are strongly against the concept of increasing the burden of levies for the self-employed, among others, as the changes work out more favourable for companies and employees. The changes should see employees earn slightly more, while companies will have less administration than to date, meaning lower costs.
The much-acclaimed flat rate tax system for the self-employed (letting them write off 40% of their income as expenses) is to be scrapped and replaced by a set monthly deductible of around EUR 190. This will mean that some self-employed will pay less, while the others will pay more.
Basically, if you are self-employed and earn up to EUR 580 a month, you could be paying less, but if you earn more than this, your contribution to reducing the budget deficit will increase. PM Iveta Radicova claims that 80% of self-employed would be paying less than till now, referring to the minimum contribution to social and health insurance of EUR 140 instead of EUR 160 at present.
Other changes concern the levels of social and health insurance levies that both employer and employees have to pay, with a gradual reduction in levies by 4% for employees planned.