The lower house of Parliament is expected to approve a government tax
package at its session starting on Tuesday. It includes a proposal to raise
taxes on alcohol and tobacco products, and an increase in parental
The basic parental allowance could rise from 80,000 crowns to 300,000 crowns. MPs are also due to start discuss the draft state budget for 2020, which counts on a 40 billion crown deficit.
In the initial round, MPs will approve the budget’s basic parameters, i.e. revenue, expenditure and deficit. MPs have tabled dozens of amendments to the tax package, only some of which the Committee on Budgets has supported thus far.
On Friday, Prime Minister Andrei Babiš (ANO) and Communist party leader Vojtěch Filip agreed to allocate an additional 4.9 billion crowns for the health sector. Originally, 334 billion crowns was earmarked for the sector.
The ANO-appointed minister of finance, Alena Schillerová, says that if the
Social Democrats put forward a special tax on the banking sector it would
be in breach of the coalition agreement.
The latter party’s minister for labour and social affairs, Jana Maláčová, said last week that she would submit a bill on a banks tax herself if no agreement was reached with ANO on the matter.
Speaking on Czech Television on Sunday, Minster Schillerová said if her cabinet colleague actually put forward legislation to that effect it could spell the end of the coalition government.
Ms. Maláčová argues that Czech banks are making record profits.
The Czech Banking Association says 15 EU states have a bank sector tax.
President Miloš Zeman will sign into a law an extended bill on electronic
cash registers as soon as he receives it. Mr Zeman made the statement on
Sunday in an interview for the website Blesk.cz.
The amendment to the bill on cash registers, approved by MPs earlier this month, extends the duty to report sales electronically to professions that are not yet subject to it, including craftsmen, doctors, lawyers and taxi drivers.
The amendment will also allow small businesses with sales of up to 600,000 crowns to record sales in off-line mode using paper receipts. At the same time some services and goods, such as, catering, cleaning services or home care will move to the lowest 10% VAT rate.
Prime Minister Andrej Babiš introduced the EET in 2016, when he was the finance minister, to counter the grey economy and tax fraud.
The lower house has approved a bill extending the law on electronic cash
registers, in other words a duty to report sales electronically, to a
category of firms that are not yet subject to it, among others to
craftsmen, doctors, lawyers, hairdressers and taxi drivers.
The amendment will allow small businesses with sales of up to 600,000 crowns to record sales in off-line mode using paper receipts. At the same time some services and goods, such as, catering, cleaning services or home care will move to the lowest 10% VAT rate.
Opposition parties, which have criticized the law as a bureaucratic burden on entrepreneurs are preparing to file a complaint against it at the Constitutional Court.
The law on electronic cash registers was introduced in 2016 to counter the grey economy and tax fraud. Prime Minister Babiš claims it has brought results and increased state revenues.
The Finance Ministry has sent the government a proposal to introduce a 7%
digital tax for large Internet companies such as Facebook and Google as of
mid-2020. According to the ministry the tax could bring approximately five
billion crowns to state coffers annually.
The proposed tax would concern internet companies with a global turnover of over € 750 million (CZK 19.1 billion), and an annual turnover of at least CZK 50 million for taxable services in the Czech Republic. Some digital economy platforms, such as Airbnb and Uber, would also be taxable.
The ministry’s proposal is based on a draft prepared by the European Commission, which however failed to win approval in the European Parliament.
Twenty-four people are now reported to have been charged in a massive tax
evasion scam involving 270 million crowns, according to a spokesperson for
the National Centre for Combating Organised Crime.
The charges against seven foreign nationals and 17 Czechs who operated fictitious companies came following a largescale operation in close to 60 sites across the Czech Republic. All except two of the suspects are currently being held in custody.
The several–month-long operation involved over 400 police and customs officers both at home and abroad. In simultaneous raids on homes and offices the police secured assets worth 68 million crowns and a number of illegally held weapons.
Following a largescale operation in close to 60 sites across the Czech
Republic on Tuesday, the police have now charged 23 suspects with tax
evasion and organised crime, the Czech News Agency reports. All except two
of the suspects are currently being held in custody.
Members of the elite National Centre for Combating Organised Crime cooperated with the Czech Customs Administration and ordinary police units in the crackdown, which is connected to suspicions of tax dodging worth hundreds of millions of crowns.
The suspects could face more than 10 years in jail if their connection to organised crime is confirmed.
The police have started a criminal investigation into the financial
management of the Stork’s Nest Farm and Hotel Complex, which is part of
the Agrofert conglomerate established by Prime Minister Andrej Babiš, the
news site Neovlivni.cz reported on Tuesday citing police spokeswoman Eva
According to Neovlivni, the police suspect the firm of extensive tax evasion. Agrofert spokesman Karel Hazelka said the management of the conglomerate had received no information on the case, but ruled out any financial irregularities at the firm.
Police earlier concluded an investigation into the Stork’s Nest Farm in connection with suspected EU subsidy fraud and proposed that Prime Minister Andrej Babiš be charged. The state attorney’s office dealing with the case has not yet reached any conclusion.
Prime Minister Andrej Babiš who established the multi-billion crown agro-chemical empire put it into trust funds two years ago in order to meet a strict new conflict of interest law.