Business News

In Business News this week: the Chamber of Deputies passes an extensive public finance reform bill; Czech banks say the reforms will mean more expensive mortgages; the governor of the Czech National Bank says the international mortgage crisis has not affected the Czech economy; the successful Czech anti-virus producer Grisoft buys out its UK and Ireland distributor; and a huge increase is seen in the consumption of soft drinks in the Czech Republic.

Chamber passes extensive reform bill

Finance Minister Bohuslav Sobotka

The Chamber of Deputies this week passed an extensive public finance reform bill, including changes to the taxation, health care and social welfare systems. There will be a flat personal income tax of 15 percent, while corporate income tax will gradually fall to 19 percent. The aim of the reforms is to improve the public finances and pave the way for the adoption of the euro.

Banks say reform spells higher mortgage rates

One effect of the reform will be more expensive mortgages for Czech home-buyers; the banks say they will need to raise mortgage rates by 0.5 to 0.8 percent to compensate for the elimination of tax relief for income earned from mortgage bonds, with which they finance loans.

Czech economy not affected by international mortgage crisis, says CNB head

Zdenek Tuma

The governor of the Czech National Bank, Zdenek Tuma, this week reassured investors that the mortgage crisis that spread from the US to Europe and Asia had not had any impact on the Czech economy. The US Federal Reserve and the European Central Bank were forced to pour large amounts into the market. By contrast, Mr Tuma told the agency Market News International that there was no need for the Czech central bank to intervene.

Successful Czech anti-virus maker buys out UK and Ireland distributor Grisoft, the Czech producer of the AVG anti-virus computer programme, is taking over its partner and authorised distributor AVG UK & Ireland, Hospodarske noviny said on Friday. AVG is one of the Czech Republic's most successful brands internationally - it is among the 20 most downloaded anti-virus programmes in the world.

Czechs have highest ratio of computer specialists among new EU states

The Czech Republic has the highest ratio of computer specialists to all employees among new EU member states, the Czech Statistical Office said this week. That ratio now stands at 1.8 percent, compared to 1.2 percent in 1995. However, this country is some way behind Sweden, the Netherlands and Norway, where there are three IT experts per 100 employees.

Soft drink consumption up 80 percent in decade

Photo: Kristýna Maková

Consumption of soft drinks in the Czech Republic has shown remarkable growth in the last decade. In fact, Czechs drank 80 percent more soft drinks in 2006 than they did in 1995, according to the Association of Soft Drinks Producers. The total of 1.29 billion litres consumed last year included almost 900 million litres of bottled water.

Travel agencies facing fine for not making full prices clear

Around 20 Czech travel agencies are facing fines from the country's commercial inspectors for failing to make clear complete prices when advertising their services, Mlada fronta Dnes reported this week. In fact, seventy percent of travel agencies investigated recently were in breach of the law on consumer protection, officials said.

Czech Republic increasing popular with Russian tourists

The Czech Republic is becoming increasingly popular as a destination for Russian tourists, with more than 80,000 visiting the country in the second quarter of this year - 40% more than during the same period in 2006. Russia is the sixth biggest source of tourists for the Czech Republic.