Business News


No more hiding from the taxman in the big city; numbers of businessmen up, number of businesses up; anonymously owned companies get eight billion in state money; welfare and unemployment expenses hit 700 billion.

Kalousek wants regional tax authorities to cut tax evasion

Miroslav Kalousek,  photo: CTK
Businesses can stop trying to avoid tax audits by moving their company headquarters to the big city. The Ministry of Finance is set on compressing the nearly two hundred financial authorities around the country into fourteen regional offices. In order to reduce tax evasion, Finance Minister Miroslav Kalousek wants to even out the probability of audits beginning in 2012. He also wants a analytical unit at police headquarters with special access to Finance Ministry data, while the ministry in turn would have more access to information on financial crime at police headquarters. Mr Kalousek pointed out that under present conditions, some authorities audit taxpayers every three years, while at others that rate is once every 165 years.

Number of Czech businesses up

Photo: archive of Radio Prague
The number of Czech businesses meanwhile grew last year by 5.4% to 363,000. More than 24,000 companies were established in 2010 while 5566 closed shop, according to an analysis by the CCB - Czech Credit Bureau. The bureau says that while the number of defunct companies did not come anywhere near the number of new ones during any month of the year, the long term trend in the net addition of companies is decreasing – i.e. more businesses, but at a slower rate. Almost half of last year’s freshmen opened their doors in Prague. The second highest location was the region of South Moravia at 11%. The least number of businesses were started in the regions of Hradec Králové and Liberec.

Number of Czech businessmen up

On a similar note, the Minister of Labour has released data stating that nearly every fifth Czech citizen is an entrepreneur. There were almost 2 million sole proprietors in the country at the end of the first quarter of the year, according to the ministry, with only a negligible number of foreigners among them. Where foreigners are concerned, there were more than 92.600 of them doing business in the country at the end of the first quarter, some 1600 more than at the end of December and a year on year increase of 5000. Some of the growing numbers of foreign business entities can be put down to easier administrative conditions made possible at the start of the year. People from outside the EU no longer have to enter themselves in the commercial register if they carry out business on a trade licence. There were also 120,000 more trade licences issued since the same time last year .

Anonymously owned companies get eight billion in public tenders

Photo: Barbora Němcová
Statistics published by the zIndex project this week showed that last year companies with anonymous owners received roughly eight billion crowns in public tenders. The largest such sums were paid by the state forestry company Lesy ČR, the road transport authority and Czech Railways’ ČD Cargo. In 2010, anonymously-owned companies won 330 public tenders worth 8.1 billion. The statistics reveal a slight decrease in the number of tenders and their worth a year earlier, but the sum is still roughly three times higher than 2006, when anonymous companies received 2.2 billion for 116 orders for public works.

State costs for welfare and unemployment up to 700 billion

At the employment office
State expenses for social welfare and unemployment last year grew by five billion to roughly 700 billion crowns. The figures come from the state closing account, which the government submitted to Parliament at the beginning of the week. In this way, social welfare and unemployment amounted to two-fifths of all of the money spent from the state budget in 2010. The majority of the expenses came from pension payments, the total amount of which was 346 billion crowns. The government’s austerity package, passed last year, was intended to decrease that amount by 23.5 billion. But it was annulled by the Constitutional Court. It is now going through Parliament again.