Final Word from Monday, July 28, 2003

The government is launching a program today for encouraging young Bulgarians, Croats and Kazahks Bulgaria, Croatia, Kazahkstan PricewaterhouseCoopers to immigrate to the CR. The official reason is a shortage of skilled workers, but the CR also wants to head off a drop in social-security receipts due to the aging population. There's also a bill in Parliament that, according to PwC, would prevent foreign employees as of Jan. 1 from avoiding social-security tax by using a foreign labor contract. This loophole is used mainly by Westerners who would never collect a Czech pension anyway and who can afford good tax advice. Some foreigners will depart if the law is passed, while others will use sophisticated tax structures to reduce their Czech taxable income and social-security obligations. In the end, the government will lose revenue, and more Bulgarians, Croats and Kazahks will be needed to make up for it. reform


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