When you say the Czech state budget, most of us think of billions, deficits and long parliamentary debates. But the budget is not just a political shootout. It is a legally binding plan for the state’s economy for one calendar year – with clear rules, approval procedure and accountability for implementation.
In this article, we explain what exactly the state budget is, who decides on it and how, what the legal regulations are, what happens during a budget proviso, and how the law defines a breach of budgetary discipline – i.e. what happens when someone uses money from the state budget in violation of the rules.
The state budget is the state’s annual financial plan that concentrates legally defined revenues and sets out expenditures to provide for the functions of the state. The law says that it is a collection of financial documents: firstly, the law on the state budget for a given year, then a breakdown of indicators and detailed budgets of individual chapters and their amendments.
Revenues and expenditures are divided into chapters (e.g. Ministry of Labour and Social Affairs, Ministry of Transport, etc.). The binding indicators (i.e. the limits which the chapter administrators may not exceed) are set by the State Budget Act. It also includes subsidy relations with regions, municipalities and state funds. These principles are regulated by the budget rules(the Budget Rules Act).
To be specific: the Law on the State Budget for 2025 (No 434/2024 Coll.) determined the total revenues and expenditures as well as the amount of the deficit, including chapter-by-chapter summaries and annexes with financial relations to territorial budgets and the EU budget.
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Each year, a separate law on the state budget for the following year is created (e.g. Law No 434/2024 for 2025). It sets out the total revenue, expenditure, balance and method of financing, and includes annexes with chapter-by-chapter breakdowns and financial relations with territorial budgets and the EU budget. It is a time-limited law – it applies to a given financial year. It guides the management of chapters (ministries and other authorities).
The basic “law of laws” for the state budget is the Budget Rules Act. It defines exactly what the state budget is, what its parts are, how it is divided into chapters, how the medium-term outlook is established and how binding indicators are set. The same law also regulates budget revenues (taxes, social security contributions, fees, CNB profit levy, etc.), subsidy relations and procedural deadlines for drafting.
In addition to the budget rules themselves, the Budget Responsibility Rules Act also looks at the budget. This sets out the expenditure frameworks for the national budget and state funds and establishes the National Budget Council (the Ministry of Finance must describe how it derives the expenditure framework together with the Council, and the Council issues an opinion on this). All of this serves to ensure that public finances are sustainable and that government debt is kept under control.
The Public Budget Stabilisation Act is also a term that is often mentioned. This was a broad package of amendments to dozens of regulations in 2007 that affected taxes, levies and other budgetary areas with the aim of improving the medium-term sustainability of public finances. It is still in force today in a later amended form and some parts of it are reflected in the current tax and budget environment. It is not a law that directly “made” the state budget each year, but it significantly shaped the environment in which budgets are made.
The state budget is the plan for the year (revenues, expenditures, financing); the state’s final accounts are the “closure” of how the economy was actually managed.
It is valid for a single financial year; after its expiry, it is rolled over into the assessment in the State’s final accounts.
Unauthorised use or withholding of state budget funds failure to meet the levy obligations of contributory organisations, etc.
The Ministry of Finance prepares the budget framework over a year and submits a proposal to the government. The government then submits the proposal to the Chamber of Deputies after approval. In 2024, the draft budget for 2025 was submitted to the House on 30 September. For the 2026 budget too, the ministry has disclosed that the government has to submit it to the House by September 30.
In the Chamber of Deputies, it is normally debated in three readings. The first reading locks in the basic parameters – total revenue, expenditure, deficit and how it will be covered; only internal transfers between chapters can be changed in the next steps. The heavy technical work is done by the Budget Committee, which is the main committee on the state budget. However, other committees come into play according to their subject-matter competence.
The second reading is for amendments (typically just transfers) and the third reading is the final vote.
The State Budget Bill is made into a valid law exclusively by the Chamber of Deputies. The Senate does not deal with the state budget – it does not go into its hands for either approval or rejection. Even when the House is dissolved, the Senate cannot replace the House with statutory action on state budget matters. This is important: the approval of the budget is simply a matter for the lower house.
What about the President? The President can veto a national budget law (it is an ordinary law, not a constitutional one), but his veto is only suspensive – the House can override a veto by a majority of all deputies – thenthe law is promulgated without the President’s signature.
In practice, the president sometimes signs the budget bill and at the same time explains why he did not veto it. For example, in 2024, President Paul did this for the 2025 state budget law, reminding himself that the House could override his veto.
If you are interested in how exactly laws are made, you can find out in our article.
If the State Budget Act is not passed and in force by 1 January, a budget proviso is triggered. There, the Ministry of Finance sets binding monthly limits and spending cannot exceed one-twelfth of the last approved annual budget for each month of the provisional period. Once the budget takes effect, the expenditure and revenue of the provisional period shall become the expenditure and revenue of the approved budget. The standstill is therefore an emergency regime to keep the state running.
The government is accountable to the Chamber of Deputies for the implementation of the state budget. After the first half of the year, it submits a report on the development of the economy and the implementation of the budget. The Ministry of Finance also monitors cash performance on an ongoing basis and reports to the Government and the Budget Committee.
After the end of the year, the Government submits a draft State Final Account (a summary of the actual results of the economy), including summaries of the State’s financial assets and liabilities, State guarantees and the results of State funds, by 30 April.
The Supreme Audit Office (SAO) also plays an important role, issuing an annual opinion on the first half-year budget execution report and an opinion on the draft state final accounts. In the opinion, the SAO assesses how the state has managed the budget, whether the data are complete and free of errors, and highlights risks.
The state budget is a binding annual plan of the state’s economy divided into chapters with binding indicators. It is based on the annual State Budget Law and on the framework provided by the Budget Rules and the Law on Budgetary Responsibility Rules.
The draft is prepared by the MoF and must be submitted by the government to the Chamber of Deputies. The latter discusses the budget in three readings (the first reading locks in revenues, expenditures and the balance). The budget is approved exclusively by the Chamber of Deputies; the Senate has no role and the President’s veto is only suspensive (the Chamber can override it with a supermajority of all deputies). If the budget is not effective on 1 January, a budget proviso with monthly twelfths applies. Implementation is checked by the government vis-à-vis the Chamber of Deputies, and after a year the state final accounts and the SAO’s opinions are submitted. The use of funds in violation of the rules is a breach of budgetary discipline and gives rise to levies and penalties under the budget rules.
He can’t. The constitution does not grant it any role in passing the state budget bill and even prohibits it from taking legal action on state budget matters (even during the dissolution of the House).
Supreme Audit Office – issues an annual opinion on both the half-yearly report and the draft state final accounts.
If the actual deficit is different from the approved law, the House of Commons decides on the payment of the deficit on the proposal of the government. Any surplus is then used to reduce the national debt.
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