Cabinet Approves Alternative to Food Vouchers and Rescue Fund For Culture Sector As Part of Wider Tax Package

Employers will now be able to offer their employees a tax-free cash lump sum instead of the current food vouchers [“stravenky”], which can only be spent on food. The change has been under discussion for many years. Photo credit: Freepik / For illustrative purposes.

Czech Rep., Jun 23 (BD) – At a meeting on June 22nd, the cabinet approved a new package of tax reforms and other financial measures, including a long-discussed move to allow employers to replace “stravenky”, the food vouchers familiar to anyone who has been an employee in the Czech Republic, with a tax-free cash lump sum.

The new scheme will work in the same way as the current one, with employers able to deduct the cost of the payments from their tax bill. However, businesses taking up the measure should save money, as they will no longer have to pay fees to the food voucher companies, and the administration of the scheme will be simplified. Employers have been asking the government to take action to reduce these costs for many years.

The Cabinet also approved a new subsidy program for the cultural and creative industries, prepared by the Ministry of Industry and Trade and the Ministry of Culture. The COVID – cultural and creative industries program will have an estimated budget of CZK 1 billion, which will be used to mitigate the negative effects of the Covid-19 epidemic on the sector. 

The fund will cover 50% of the cost of cultural events postponed or cancelled due to the epidemic, up to CZK 5 million. It will also support small- and medium-sized businesses in the creative industries, in the form of subsidies and creative vouchers.

Other measures in the package include:

  • More power and flexibility for municipalities to set local real estate tax rates.
  • A gradual increase in tobacco duty until 2023.
  • An increase in the state contribution to facilities caring for vulnerable children, from CZK 22,800 to CZK 30,000 per child per month.
  • A 10% per child per month increase in financial support for foster parents, and other related payments.
  • The release of CZK 2.5 billion to fight deforestation.
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