The Social Democrats, ANO and the Christian Democrats have reached agreement on a coalition deal. The document will be signed by party representatives on Thursday and made public the following day. The parties hammered out the deal late on Tuesday night after lengthy talks. On the issue of health fees, they have agreed to remove them for seeing a doctor but retain them for visits to accident and emergency. Regarding VAT, there will be a second lower rate covering medicines, books, nappies and children’s foods. The three parties are expected to focus on the division of portfolios next week when the leader of the Christian Democrats returns from an overseas trip.
The parties of the emerging coalition government are debating tax changes as of 2015. Social Democrat leader Bohuslav Sobotka told Czech Television on Sunday that the proposal currently being discussed envisaged three VAT rates as of 2015 – a standard rate and two lower rates with medicines falling into the lowest category. The fallout in state revenues would be compensated for by higher corporate taxes. Details of the emerging agreement are still to be finalized. The Social Democrats, ANO and the Christian Democrats say they have made significant progress on policy matters. A debate on the division of ministerial posts has been postponed until mid-December.
Trading firms’ obligation to check their business partners’ VAT records has won the Absurdity of the Year award, the organizers said on Thursday. The respective legislation, which came into force last year, was supposed to curb tax evasion. However, critics say the state in fact transferred its responsibility for tax collection onto private companies which have to make sure their business partners have paid the value added tax. If they fail to do so, the companies face the risk of themselves having to pay VAT for their business partners. The 7th annual Absurdity of the Year awards also highlighted the fact that the Czech authorities reject tax returns in the pdf format.
The result is the worst-ever in a national election for the once-dominant Civic Democrats. The party ahead of the election had 53 mandates in the lower house and retained just 15 – a difference of 38. The result follows scandals which plagued the previous government as well as the former prime minister, Petr Nečas. Acting party leader Martin Kuba called the result a “major defeat” and said the Civic Democrats would head into opposition. He stressed that the party would continue inner-party changes kick-started after the fall of the government.
One of the front-runners in the upcoming Czech lower house elections is the newly-formed grouping ANO which polls suggest might take as much as 14 percent of the vote. Founded by the Slovak food magnate Andrej Babiš, the group only revealed its detailed policies rather late in the race. In this edition of Marketplace, I discuss ANO’s economic programme with Ivan Pilný, the party’s economic expert and former Microsoft CEO for the Czech Republic and Slovakia. I began by asking him if he agreed with Andrej Babiš’ view that the Czech Republic needs to be run like a company. More
Former Prime Minister Petr Nečas married his girlfriend and former chief-of-staff Jana Nagyová on Saturday, Czech news servers reported. A number of corruption cases involving Ms. Nagyová, became the reason for the Mr. Nečas’ resignation and the fall of his government in June. Ms. Nagyová was arrested by the anti-corruption police and accused of ordering unauthorized spying by the military intelligence service of Mr. Nečas’s former wife Radka as well as being involved in the trading of lucrative positions in exchange for supporting the government with three MPs at the end of last year.
Former deputy prime minister Karolina Peake was questioned by the corruption police on Thursday in connection with the spying scandal that brought down the centre-right government of prime minister Petr Nečas. Mrs. Peake, said the questioning had largely focussed on her brief time in office as defence minister and reiterated that she had no knowledge of the fact that the then PM’s chief-of-staff Jana Nagyová had ordered the military intelligence service to shadow his wife. She confirmed Mrs. Nagyová’s seemingly unlimited influence at the time, by telling journalists that she herself had been sacked as defence minister after just eight days in office because she had failed to consult her decisions with the prime minister’s chief-of-staff.
The former prime minister, Petr Necas, has employed his former chief of staff Jana Nagyova, as his personal assistant, according to Saturday’s edition of the daily Mlada fronta Dnes. Although the spying and corruption scandal in which she is alleged to have played a central role brought down his centre-right government Mr. Necas has stood firmly by his chief of staff with whom he is now in an open relationship. The Office of the Government terminated Jana Nagyova’s work contract on Friday. She will not be receiving any severance pay.
In one of its major decisions since assuming office in July, the Czech government has decided to end support for most renewable sources of energy. The draft legislation, triggered by relatively high electricity prices, would scrap state support for new solar and biogas plants as of 2014. It would also cap the subsidies paid by consumers in support of renewable energy sources. More
The interim government on Wednesday rejected draft legislation which would have allowed clients to withdraw from the recently-established “second pillar” of pension reforms (that is savings in private pension funds) at a later date if they so wished. The prime minister made clear for the government that such changes were anti-systemic. The draft amendment was proposed by former finance minister Miroslav Kalousek, who spearheaded the second pillar under the previous government. A final decision on the matter will be up to the Chamber of Deputies. Far fewer clients signed up for the second pillar before a key deadline earlier this year than previously expected; it is thought that the raising of restrictions could make the package more attractive to potential clients.