Business News

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In this week’s Business News: sharp hike in VAT floated; electricity bills seen rising by as much as 17 percent; Škoda Auto outlines ‘green’ plans; first half beer demand dips; and betting company announces stock exchange debut.

PM unveils plans for VAT rise to pay for reforms

Czech Prime Minister Petr Nečas has floated the radical idea of raising the lower rate of Value Added Tax from 10 to 16 or 17 percent in 2012. The prime minister announced the idea as a possible way of bank rolling cuts in company insurance costs and pushing through pension reform thanks to the 40 billion crowns that could be raised. But he admitted the move, which would increase the costs of around two-fifths of frequently bought goods, had not been fully discussed with coalition partners.

Regulator sees electricity hike of up to 17 percent

Electricity costs will next year climb by around 12 percent for households and 17 percent for companies, according to estimates by the Energy Regulatory Office. If realized, that sort of rise would be the steepest for households in the last decade. The regulator’s estimates are an attempt to get to grips with the costs of paying for renewable electricity and in particular the boom in solar power this year. The government is still looking for ways of curbing the expected increases, with one idea being that higher taxes on coal and gas can be used to cushion the blow.

Škoda Auto showcases low consumption; electric cars in Paris

Photo: CTK
Carmaker Škoda Auto has unveiled its latest moves to produce environmentally friendly models at the Paris Motor Show. It rolled out its new ‘green line’ range including improved motors, engine shutdown during congestion, recuperation of brake energy and better aerodynamics. These improvements will be offered across all its current range. The carmaker also showed off its first pilot electric car, an adapted Octavia, capable of top speeds of 135 kilometres an hour and eight hours of driving from one battery charge. Around 20 such vehicles will undergo road tests next year. The company says full scale production could be envisaged within three to four years.

Sour taste from first half beer sales figures

Czech beer sales slumped by 12 percent in the first half of the year with demand dropping at home and abroad according to the national beer and malt association. The latest figures follow a 6.0 percent fall in production last year. The association says a decline in tourist numbers was partly responsible for the latest fall in consumption, but tax increases pushing up beer prices have also had an impact. Poor summer weather has also been blamed. Some mid-sized breweries have apparently weathered the downturn better than the bigger market leaders.

Fortuna seeks backers for bourse debut

Bet on the betters: that is essentially the offer being made by the owner of Czech gambling company Fortuna. The Penta investment company says it is floating a minority stake in the betting company on the Prague and Warsaw stock exchanges by the end of the year. Fortuna will become the first new company to make it onto the Prague exchange in two years. Penta claims that with solid 10 percent growth over the last few years and around a third of the Czech market, Fortuna is a safe bet.