New public-private council will work to improve business climate
Prime Minister Vladimir Spidla's first press conference since the Czech Republic joined the European Union was decidedly free of the pomp and circumstance that marked the historic expansion of the bloc: It was back to the daily grind on Monday, with the fireworks, champagne and foreign dignitaries of the past weekend a pleasant memory. Brian Kenety reports.
The occasion was the launch of a new public-private Council which aims to give Czech businesses a regular channel to meet with legislators before laws regulating business are drafted. Mr. Spidla said the main task was to ensure policy remained "useful and fair". He acknowledged that the government hadn't made sufficient progress in improving conditions for doing business, as only 20 to 30 per cent of its promises in this regard had been fulfilled.
Jaromir Drabek, the president of the Economic Chamber, told Radio Prague that the organisation is pushing for more transparent and simpler laws, less bureaucracy and advanced notice about changes in legislation affecting entrepreneurs. The law on Value-Added Tax for example, which affected virtually every business, was published only a few days ahead of when it came into effect.
"Conditions for entrepreneurship are not suitable for us in long-term view. There are two main problems. First, it's a problem of complexity of law for small and medium-size entrepreneurs. And the second main task is to fulfil executive role of the state - to control, to check the level of fulfilling laws and duties of entrepreneurs."
In the first quarter of this year, some 100,000 entrepreneurs closed down their businesses, many because they were unprepared for changes in Czech tax and operating laws. The business daily Hospodarske Noviny reported this week that at least 10 laws now on the books, including the VAT law, are incompatible, leading to confusion and uncertainty. Mr. Drabek said that the work of the Council would be crucial in getting entrepreneurs' views heard not just in the ministries but in the Parliament, were the laws are made.
"We are participating in various discussions, mainly with the Ministry of Industry and Trade, but the main problem is to carry these outputs from discussion on level of ministry to the political level. And this was the topic in today's discussion with the prime minister and we discussed about improving conditions for entrepreneurship."
Business leaders and right-wing members of Mr. Spidla's ruling coalition are also calling for lower corporate tax rates. The current Czech rate of 28 per cent is about average for the European Union but it will drop to 24 per cent in a couple of years. German Chancellor Gerhard Schroeder, complaining of "fiscal dumping" by the new EU member states has called for EU-wide tax harmonisation and warned that implementing low tax rates could mean losing subsidies from the EU.
We'll be examining the issue in detail in this Thursday's edition of Economics Report.
