Business News

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Revenue offices are to overlook fines and interest on old tax arrears in an attempt to secure extra revenues for the state budget. Czech producer prices grew 0.3 % month-on-month in March, drop 0.4 % year-on-year. The volume of payments with bankcards in the Czech Republic rose by 84 percent in 2002. Both the ruling coalition and the opposition have been presenting proposals for changes in the tax system lately with little success. Czech retail sales rose by a stronger than expected 4.3 percent year-on-year in February. The government is planning to build a new industrial zone near the town of Zatec, west Bohemia.

Revenue offices to pardon fines and interest on old tax arrears

Revenue offices are to overlook fines and interest on old tax arrears in an attempt to secure extra revenues for the state budget. The Finance Ministry said the pardon would apply to those who pay their outstanding debts with their revenue office originating between 1993-2001 by the end of this July. The Finance Ministry expects that the friendly gesture will ensure an additional inflow of money to the state budget and reduce the overall volume of accumulated tax arrears, which has exceeded 100 billion CZK for the past decade.

Oil costs boost March Czech producer prices

Czech producer prices grew 0.3 percent month-on-month in March. The Czech Statistics Office said the increase was mainly due to a rise in fuel costs. However, overall price pressures remain weak. In year-on-year terms, prices charged in industry, as measured by the producer price index, dropped 0.4 percent last month, the fourteenth consecutive month of decline.

Non-cash payment ever more popular in Czech Republic

The volume of payments with bankcards in the Czech Republic rose by 84 percent in 2002. According to the Visa International association, there are 5.4 million bankcards among the Czech population of ten million. Debit cards account for 82 percent of the market. However, credit cards have been increasingly popular, too, with their number growing by 66 percent in 2002. The popularity of bankcards goes hand in hand with a quickly growing number of retail outlets where non-cash payment is possible.

Changes in the Czech tax system difficult to pass, more in the pipeline

Both the ruling coalition and the opposition have been presenting proposals for changes in the tax system lately. However, few of them have a chance of passing. On Wednesday, the Lower House rejected a draft law that would increase consumer tax on tobacco and alcohol. The Finance Ministry hoped to raise more than a billion crowns in the state budget and will submit a similar draft in a few weeks' time.

The Lower House also rejected a proposal by the main opposition right-of-centre Civic Democrats to scrap the property tax levied on buildings and land. While proponents of the change claimed the collection of the tax costs nearly the same amount as what is actually paid, the government will not hear about removing it.

In the next round, the Finance Minister would like to raise social and health tax for the self-employed. At the same time, he suggests a reduction of the corporate income tax to 25 percent from the current 28 percent within three years.

Retail sales on the rise

Czech retail sales rose by a stronger than expected 4.3 percent year-on-year in February, after January's 3.5 percent growth. The Czech Statistics Office said fuel and car sales were especially strong, rising 8.5 percent and 5.8 percent year-on-year respectively.

Falling prices, strong wage growth and record low costs of money have discouraged saving and prompted Czech consumers to spend freely, creating demand that helps prop up an economy hit by a global growth downturn.

New industrial zone to emerge in Western Bohemia

The government will spend 400 million crowns to prepare an industrial zone near the town of Zatec, west Bohemia. Trade and Industry Minister Milan Urban says the zone will create up to 10,000 new jobs both directly and indirectly in a region with an above-average unemployment rate.