The Chamber of Deputies approved in the first reading another government-sponsored bill on value added tax which reduces VAT on coffee, tea, chocolate and sweets and raises it on various services, such as hairdressing, cleaning, and shoe repairs and on certain types of construction works. The changes should come into force on May 1, 2004, when the Czech Republic joins the European Union. While the bill shifts some services from the reduced 5-percent VAT rate to the standard 22-percent rate, it moves other services the other way round.
Earlier, the parliament approved a law that moved a range of goods and services, including telecommunications and legal and tax advisory, as well as many environmentally friendly products to the higher VAT rate as of January. The VAT changes are expected to bring an extra 13 billion crowns to the central budget next year, while regional and municipal budget should help themselves to another 4 billion. Finance Minister Bohuslav Sobotka expects the VAT changes to add 1.5 percentage points to the inflation rate, but economic analysts and the opposition are more sceptical.
Interior Minister Stanislav Gross has told the daily Mlada fronta Dnes on Saturday that he and his family were in danger. He denied that the alleged threat of a physical assault was a speculation, saying the ministry's security department had warned him against it. Two years ago, Mr. Gross received a warning against a possible attack aimed at him or his family in connection with the investigation of a crime, which has not been concluded yet. The newspaper quoted police sources as suggesting that an influential group of foreign entrepreneurs who are seeking to gain important state contracts were behind the threat.
Czech ambassador to Kuwait Jana Hybaskova, who was recalled on Friday, insists on her criticism of the government regarding the decision to withdraw the Czech Army field hospital from Iraq. Foreign Minister Cyril Svoboda said Jana Hybaskova was removed from the post after persistent criticism of her government's policy in Iraq. The government decided to withdraw the field hospital from the Iraqi city of Basra by the end of the year, sending 80 military policemen to Iraq instead. Mrs. Hybaskova believes the withdrawal of the field hospital harmed the Czech Republic, because it comes at a time when in her view, the presence of the hospital could have helped the Czech Republic take an active role in the economic transformation of southern Iraq.
We are expecting a mostly cloudy day with morning fogs and low cloud formations in the morning. The highest daytime temperatures should range from 6 to 10 degrees Celsius.
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