Czech Prime Minister Andrej Babiš and Finance Minister Alena Schillerová are considering tax increases on dividends and investment apartments to narrow the state budget deficit, aiming to have legislative changes ready within 2 years.
Fiscal deficit pressures
The Ministry of Finance submitted a proposed state budget deficit of 389,000,000,000 CZK for next year. The shortfall has prompted the government to examine new revenue sources ahead of a 2028 target for full legislative readiness.
Schillerová had earlier announced planned tax increases targeting gambling and addictive substances. Those plans cover alcohol, tobacco, and kratom.
Dividend flows and property
Babiš pointed to international differences in dividend taxation as a potential area for reform, noting that taxation of dividends is reportedly 25 percent in Germany and Austria while citing a 15 percent domestic rate. An estimated 280,000,000,000 CZK leaves the country annually via dividends, Babiš said, arguing that the government must address these outflows.
The government is also reviewing property taxation on investment apartments. Under current rules, revenues from the taxation of investment apartments accrue exclusively to local municipalities rather than the central government state budget.
Source: The Ministry of Finance
