FACTBOX-Czech government measures to tame budget deficit

Other spending should decrease by 3 billion crowns. BUDGET REVENUES EXCISE TAXES: The government aims to raise an extra 7.5 billion crowns from higher taxation on tobacco, spirits, and gambling. CORPORATE TAX: The government does not plan any change to affect collection of corporate tax in 2024.

The Czech centre-right government on Thursday agreed a package of spending cuts and tax hikes aimed at cutting the central European country's deficit by 94.1 billion crowns ($4.43 billion), or about 1.2% gross domestic product, in 2024. In 2025, the package should improve the budget balance by another 53.4 billion crowns.

The package includes cuts in subsidies as well as increasing corporate tax and taxation on tobacco, alcohol or gambling. The following figures are for the 2024 state budget.

BUDGET SPENDING Spending cuts should amount to 62.4 billion crowns in 2024.

SUBSIDIES: The government will cut subsidies by 45.6 billion crowns, mostly in industry, agriculture, and transportation. STATE SPENDING: The government aims to cut spending on its operation by 11.1 billion crowns, and cut salaries by 9.7 billion crowns. Other spending should decrease by 3 billion crowns.

BUDGET REVENUES EXCISE TAXES: The government aims to raise an extra 7.5 billion crowns from higher taxation on tobacco, spirits, and gambling.

CORPORATE TAX: The government does not plan any change to affect collection of corporate tax in 2024. In 2025, an additional 22 billion crowns should be collected from the tax rising by 2 percentage points to 21%. TAX BREAKS: The government will abolish tax breaks worth 2.3 billion crowns.

PROPERTY TAX: A higher property tax will add 9 billion crowns. PERSONAL INCOME: Adjustments will raise 1.8 billion crowns.

VAT: Value-added tax (VAT) will have only two rates - basic at 21% and lowered at 12%, compared to two lower rates of 10% and 15% currently used. The change decreases budget revenue by 4.1 billion crowns. ($1 = 21.2420 Czech crowns)