| Description: | The Czech Republic has one of the highest proportions of self-employed workers in the EU workforce. According to statistics from the Czech Social Security Agency, the total number of self-employed workers (for main and secondary activities) has already exceeded 1 million and the numbers are still growing. In the last few years, the direct tax, social security and health insurance systems for both employees and self-employed workers have been significantly modified. On average, self-employed workers still face lower tax and contribution obligations. Moreover, the existing (as well as the newly proposed) system of contributions for self-employed workers has elements of vertical injustice, as low-income self-employed workers pay proportionally higher contributions than higher-income self-employed workers due to minimum contributions. At present, it is likely that at least some professions have the possibility to apply disproportionately effective labour taxation, leading to the so-called 'schwarzsystem', i.e. illegal employment in the form of disguising the actual employment relationship with another contract. Toleration of the “schwarzcsystem“ leads to increasing perceived unfairness of the tax and levy system, lower tax and insurance collection, less legal protection of the workforce and, last but not least, an outflow of skilled labour from the public sector, which mainly offers employment. |
