The Czech government’s attempts to reduce its spending deficit is forcing it to look for new ways to produce revenues. In addition to raising taxes, the Finance Ministry has decided it wants to tax the technical reserves held by insurance companies. Insurance companies have warned that such a move would reduce the amount they could pay out to their life insurance clients at the end of their contracts. As an alternative to the tax, insurance sector are offering to invest CZK 10bn into affordable housing and social services such as retirement homes and long-term care facilities. This is comparable to the National Development Fund that’s been created by the state and the four largest commercial banks, which are contributing CZK 7bn that will go to projects that support social and economic development.
