The Association of Czech booksellers and publishers has launched a new campaign called ‘Books without VAT’ in order to drum up support for the existing 15 percent rate to be slashed. The centre-left government of Bohuslav Sobotka is due to discuss the matter, possibly lowering the VAT on books and some other items to as little as five percent.
Minister of Finance Andrej Babis has extended the list of state companies whose bank account surpluses could be used to help the state budget. Babis told journalists that Czech Post, oil pipeline company MERO, fuel distribution company ČEPRO, and the State Institute for Drug Control could all contribute to the state coffers. He has already said that almost 70 percent state controlled power company ČEZ could pay out its total profits for 2013 in dividends and that he is counting on around 4 billion crowns from the state forestry company. Former finance minister Miroslav Kalousek on Tuesday attacked Babiš for raiding the accounts of state firms saying that funds should be left with them to develop the firms.
The Czech public finance deficit fell in 2013 to 1.44 percent of Gross Domestic Product from 4.2 percent in 2012, the Czech Statistics Office announced on Tuesday. That performance would put the country in line to join the euro zone on the public deficit criterion for the first time since 2008. The government is counting on a public deficit below 3.0 percent this year as well. In separate figures, the office revised downwards its previous growth figure for the last quarter of 2013 to 1.2 percent year on year and 1.8 percent quarter on quarter. The Czech economy shrunk by 0.9 percent over the whole year.
Czechs are expected to pay on average 10,192 crowns a month in taxes in 2014, with the highest amount 4,312 crowns going towards social insurance, according to an information brochure published by the Czech Finance Ministry. People will pay on average 2,323 crowns a month in value added tax, 1,152 in excise duty and 1,128 in individual income tax. The brochure, intended for the public, represents the Czech version of the Citizens Budget whose publication is recommended by international organizations such as the World Bank, the OECD and the International Budget Partnership.
The Finance Ministry is aiming for a 2015 state budget with a 100 billion crown deficit, i.e a gap below 3 percent of the GDP, according to ministry sources. The proposed draft budget will be put to the three coalition parties of the centre-left government on April 9th. Finance Minister Andrej Babiš has refused to reveal further details until the proposal has been debated in cabinet. The ministry wants to improve the state of public finances by an overhaul in public spending and cracking down on tax evaders. The finance minister has also indicated he wants to invest or use profits from state owned firms, such as the power giant ČEZ.
Prime Minister Bohuslav Sobotka has urged Finance Minister Andrej Babiš, who has repeatedly come under fire for conflict of interests, to give up his business activities and concentrate solely on politics. Mr. Sobotka made the statement just hours after CDU MEP and member of the European Parliament's budget control committee, Ingeborg Grassle, brought up the subject at a press conference in Prague saying that Mr. Babiš as finance minister represented such a danger of conflicts of interests that in her opinion cooperation with Prague would be difficult. Mr. Babiš, whose firms have received 2.6 million euros from European funds, said he fully adhered to the conflict of interests law and was not actively involved in running a business but merely owned the Agrofert company.
The prestigious US Mayo Clinic has threatened to end its Czech collaboration focused on Brno’s International Clinical Research Centre unless outstanding bills are paid by the city’s St. Anne’s University Hospital. Some of the debt has accumulated though the Mayo Clinic’s training of Czech doctors. Both the Brno hospital and Czech Ministry of Education have said that they are keen to prolong the cooperation and pay the outstanding bills dating from last year. The Mayo Clinic is regarded as one of the best research hospitals in the world.
A German Christian Democrat politician has expressed fears that Czech Finance Minister Andrej Babiš represents such a danger of conflicts of interests that cooperation with Prague will be difficult. CDU member of the European Parliament and member of its budget control committee, Ingeborg Grassle, expressed her concerns during a press conference, adding that Babiš’ companies have been paid 2.6 million euros from EU funds. She added that the Czech Republic’s system for pumping EU funds laid them open to massive abuse. The head of the budget committee later said she was expressing a personal opinion. Concern have frequently been expressed that billionaire Babiš’ media, agricultural and chemical interests make it difficult for him to make objective decisions as finance minister.