Finance minister wants to boost business with reduced VAT rate

Czech Finance Minister Miroslav Kalousek is considering introducing a reduced VAT rate - from 19 to 5 percent - on certain labour intensive services, such as catering, construction and hairdressing. He told Tuesday’s Hospodarské noviny that direct tax cuts would be a good way to boost the economy, but since they were not politically feasible he was now considering a reduced VAT rate instead. The minister said this would have to be discussed within the EU, but that he first wanted to know the opinion of the newly established National Economic Council which is to help draft a rescue package for the economy.