The International Monetary Fund (IMF) has recently concerned about the lack of assurance about future fiscal measures in the Czech Republic and the recent initiation of a third value-added tax (VAT) rate. The IMF stated that the Czech Republic has already attained a pointed fiscal modification over the last few years, which qualified it to leave from the excessive discrepancy procedure and retained debt levels limited.
However, the Finance Ministry has also made an updated proposal of the Fiscal Framework Reform, which includes expenditure ceilings derived from the medium-term objective of a 1% of GDP structural deficit, a debt brake rule starting at 55% of GDP, and a Fiscal Council. Finally the IMF suggested that it is important for the Czech Republic to decrease doubt regarding tax policies and simplify compliance with tax requirements to improve the business environment.
