Organizations representing businesses have welcomed the new system.

"[Anything] that reduces bureaucracy and running between state offices is good," said Bedřich Danda, chairman of the Entrepreneurs Association.

Finance Minister Bohuslav Sobotka announced the online tax collection system for businesses in early February, one year after it launched a similar program allowing individual citizens to file financial reports on the Web.

Sobotka hasn't specified when the portal will go up, but said it will offer limited services in the beginning. This means companies will at first only be able to use the system to monitor the balance of tax accounts. Later on, the tax portal should facilitate full online communication between financial authorities and businesses.

Danda said the system should streamline both the paperwork and procedures for submitting corporate tax returns. He pointed out, however, that security will be a concern.

"Security of the portal will be essential," he said. "The government will need to pay particular attention to this."

IBM will develop the portal, which should cost approximately 70 million Kč ($2.9 million). Sobotka said money from European Union funding will be used to finance part of the cost.

Chasing the money

The new tax portal for businesses is a part of the government's overall effort to increase the transparency and efficiency of tax collection in this country.

Last year, the government recorded its highest ever tax yield — 459.2 billion Kč. In 2004, tax authorities collected 406.1 billion Kč.

The higher yield was mainly attributed to the fact that businesses saw revenues increase last year. While the government brought in 79 billion Kč in corporate taxes in 2004, that figure rose to 100.3 billion Kč last year.

The Finance Ministry has made clear its intention to continue increasing revenue from corporate taxes by developing new programs to help the government deal with businesses. The ministry is also considering launching a special tax office that would deal exclusively with companies that have annual turnovers exceeding 1 billion Kč.

"If tax [collection is to be] efficient, we not only need to employ high-tech, we need to employ specialists with an insight into particular business sectors," said Lubomír Janoušek, director of the Prague Financial Directorate.

E-government develops

Using the Internet to streamline tax collection is yet another example of the country's rapidly developing e-government system.

The government launched e-communications between state offices and the public in the fall of 2003. Since then, it has expanded into a network that includes a range of services, from allowing people to get various identification cards online to checking whether a car purchased secondhand is registered as stolen.

The Czech Republic has made so much progress that in late 2004 a study by The Economist magazine identified it as the most developed country in the region in terms of the spread of e-government. And, last spring, a report issued by the European Commission said the Czech e-government system was clearly above the EU standard.

The government continues to look for ways to get people and businesses involved in online communications.

Last year, the Information and Technology Ministry introduced a program designed to increase computer literacy. In two-hour seminars financed by the government, the program teaches people to use information technologies for communicating with public offices and filing tax reports. More than 80,000 people have already participated in the seminars.