Minister Barta says government will valorize pensions to fully make up for inflation

Transport Minister Vit Barta said on Sunday that the government intended to regularly valorize old age pensions in order to make up for the planned hike in VAT. Speaking on Czech television Mr.Barta said socially weaker groups of the population would not be expected to shoulder the burden of a tax hike intended to help co-finance the planned pension reform. The government last week scaled back a plan to hike the value-added tax, agreeing to raise the lower rate from 10 to 14 percent in 2012 instead of unifying it with the top 20 percent rate. From 2013, both VAT rates should be unified at 17.5 percent. Even so, the plan has its critics who point out that a VAT hike was not essentially needed.