Electronic tills (EET) from the other side

Translated from Czech EET z druhé strany published on June 15, 2016

 A. Babiš: „Thanks to the electronic tills (EET), we’ll have 18 billion CZK to build hospitals, increase pensions and wages for teachers and firefighters.“

In Croatia, after the introduction of EET, 28% of the self-employed entrepreneurs and 34% of trade sector firms went out of business. See Elektronická evidence tržeb se v Evropě neosvědčila (Electronic sales records in Europe did not work)

As of December 31, 2015, the Czech Republic had 576,911 full-time, self-employed citizens, plus 387,609 who were self-employed on the side. 264,305 employees worked for them. The average wage in 2016 is 26,480 CZK. (According to the Czech Bureau of Statistics)

When we take a conservative figure of 20% of the self-employed in Czechia will go out of business, how do the specific numbers look then?

115,000 full-time, self-employed paying social insurance premiums – min. 50,000 CZK ………. 5.75 billion CZK

Annual social premiums for 77,500 secondarily self-employed (CZK 5,000) ………… 387.5 million CZK

Annual unemployment benefit payments for 53,000 employees out of work ……………. 9.54 billion CZK

Annual unemployment benefits for those employees ………….. 3.233 billion CZK

Unemployment benefits for full-time self-employed, out-of-work ………. 2.07 billion CZK

Annual total of income taxes that will not be paid. ………………………… 20.98 billion CZK

The treasury will miss nearly 21 billion CZK, i.e. almost 3 billion CZK more than the promised proceeds from the introduction of EET.

In addition, there will be 13 billion CZK worth of unearned salaries, which would otherwise be returned to the economy in the form of spending. This, in turn, constitutes income (and taxes) for other entrepreneurs. Unemployment benefits will be only about 3 billion CZK.
Whether or not the amounts that A. Babis promises to collect from EET are reality, is one thing. It’s the reality of the results, not to mention system implementation costs, or even the integrity of the law that are the on the other sides of the coin.