PM backtracks on tax reforms in wake of election defeat

Prime Minister Petr Nečas, who has come under fire for his party’s defeat in the weekend regional and senate elections, has expressed readiness to temper some of the government’s reforms. At a stormy meeting of the Civic Democratic Party’s executive council on Monday Mr. Nečas presented the party leadership with an alternate tax-hike proposal according to which only the lower VAT rate would be raised from 14 to 15 percent next year while the basic higher rate would remain unchanged at 20 percent. The government’s original tax-package that called for a 1-percent hike in both VAT rates was rejected by the lower house of Parliament with the help of six rebels from the prime minister’s Civic Democratic Party. Mr. Necas has also expressed readiness to revise some steps in the area of social welfare benefits.

Author: Jan Richter