TLUSTÝ

On May 3 Civic Democrat Vlastimil Tlustý, who served a short stint as finance minister, proposed eliminating all but 35 of the current 363 tax breaks as a way of financing his proposed 12 percent flat tax. Tlustý is unhappy with the Cabinet’s proposed reforms and seeks to bring them closer to promises made by his party during last year’s elections.

On the same day as Tlustý’s proposal, the opposition Social Democrats presented their own tax reform plan. The party would retain the current corporate tax rate of 24 percent and the progressive income tax, curbing the public-finance deficit through moderate cuts to public spending.

Firms will pay out the highest dividends in Czech history this year, according to experts cited by the daily Hospodářské noviny. The total payout will be between 130 billion Kč ($6.3 million) and 150 billion Kč, up 10 percent from last year. Nearly two-thirds of that total will go to foreign investors. Spanish-owned Telefónica O2 will pay out the single highest dividend in the Czech Republic’s history, worth 16.1 billion Kč.

The Chamber of Deputies passed an amendment May 2 tightening the restrictions placed on investment incentives. While the bill reduces the lower limit for qualifying investments to 100 million Kč from 200 million Kč, incentives will be limited to high-tech firms and to regions with high unemployment.

The Finance Ministry has announced that the public deficit for 2007 will likely be 20 billion Kč higher than the 91 billion Kč figure originally budgeted. The increase is caused by lower-than-expected revenues from corporate and cigarette taxes, the ministry said.

ČEZ began buying back shares in the company May 2, purchasing 223,000 shares on the Prague and Warsaw stock exchanges. The action saw share prices jump to a record high of 1,041 Kč. The sale of 7 percent of the state’s stake in the company has not yet begun. The Finance Ministry expects to choose a broker, in secret, this month.

The Anti-Monopoly Office will publish the rules it follows in setting fine sizes on its Web site this month, the agency said. The move is required by a directive from Brussels. The office will also ramp up its prosecution of companies that think violating anti-trust law will pay off even if they are caught, said Chairman Martin Pecina.