Final Word from Thursday, November 27, 2003
President Václav Klaus got lots of press for vetoing a bill yesterday for raising the health tax on the self-employed, but scant attention has been paid in the media to his approval of laws imposing social-security and health tax on foreigners. No one will win any public praise for standing up for foreigners, but this doesn't change the fact that the social-tax changes are a time bomb that is already going off. Hyundai rejected the CR due to high taxes, and in other cases companies or individuals are considering exiting the CR. Slovakia is looking ever more attractive. According to one calculation, a manager (whether Czech or foreign) and his employer will pay E28,500 in social and health tax in the CR next year on a E60,000 annual salary. In Slovakia, the social and health tax would be E4,650, thanks to the cap already in place. The difference is astonishing and simply cannot be overlooked.