Domestic defence contractors want a piece of the NATO pie; The Cabinet agrees a comprehensive plan for promoting economic growth; Additional $60 million earmarked in support of Hyundai car plant project; DHL Solutions to oversee Lego Group toy maker's new European distribution centre outside Prague; New Agriculture Minister named following scandal at Czech Land Fund
Farmers 'ready' to accept land swap deal at Hyundai site; Czech household savings rate down 50 percent since 1995; Parliament budget committee proposes lower penalties for unpaid taxes; Czech exporters say corruption a far greater problem than terrorism; Fastest growth of 2005 inflation recorded in October
The Cabinet on Wednesday accepted Agriculture Minister Petr Zgarba's proposal that Parliament dismiss the entire board of the powerful Czech Land Fund - the body responsible for the sale and management of state-owned land. The proposed sacking of the Land Fund board - of which Mr Zgarba is chairman - comes in reaction to outcry over the sale this summer to "speculators" of property now worth hundreds of times the asking price.
Regional election leaders of the main opposition Civic Democratic Party have convinced the party leadership to revise its campaign platform to place a "family" emphasis on the introduction of a flat tax. The flat tax and a universal social benefit could become part of the pro-family policy project, said party deputy Vlastimil Tlusty. The change in tactics comes on the heels of the passage of a popular tax-cut proposal drafted by the ruling Social Democrats. The proposal - which would benefit people earning less than 30,000 crowns per month, or roughly 9 out of every 10 taxpayers - has undercut the appeal of a flat tax, political analysts have said. The centre-right Civic Democrats are now expected to concentrate on presenting themselves as champions of small businesses through other proposals. These include efforts to reduce bureaucracy at all levels of government, and the fight against corruption.
Allegations that state officials - including Agriculture Minister Petr Zgarba - have passed on inside information to land speculators has prompted an intensive review of land transfer and privatisation deals made this summer. At the centre of the investigation is a state-owned parcel of land sold to a friend of Minister Zgarba for just $160,000 (4 million crowns) that is now said to have a market value of over $60 million.
The Czech Republic's Land Fund will review around fifty-five real estate contracts closed from June 7 to July 1. The Fund, which primarily manages state-owned real estate, is looking into allegations that it transferred some 600 hectares of lucrative land to speculators, in deals that profited them two billion crowns. The deputy director of the Fund's executive committee, Karel Machovec, says two employees have already been fired in connection with the affair. The opposition Civic Democrats called onto agriculture minister Petr Zgarba, who chairs the Fund, to resign from the post of minister last week.
The financial situation of Czech households has improved by over ten percent when compared to last year, according to a study made by the Italian UniCredito group. Households in seven Central and Eastern European countries were reviewed and results suggest that Czech households are currently the richest in the region. However, those of Poland and Slovakia are quickly catching up. The study looked into bank savings, stock and bond investments, and also life insurance policies but did not include the real value of property, i.e. cars, land, and real estate.
The Czech Parliament on Tuesday passed a significant tax cut which will affect some 4 million Czech taxpayers next year. Employees will save an average of around 400 crowns per month - or about 13 US dollars. That isn't much but it is significant when one considers that in the Czech Republic the average monthly salary still averages only 18,000 crowns - around 800 dollars US. In that light, many Czechs will see the break as a significant step.
The lower house of Parliament has approved a series of tax cuts which will primarily benefit people whose monthly income is below 30 thousand crowns. The bill was approved unanimously, although the opposition Civic Democrats criticized the ruling coalition for not effecting tax cuts which would benefit higher income groups as well. Finance minister Bohuslav Sobotka said the measure would affect 90 percent of all tax payers and would reduce income into state coffers by an estimated ten billion crowns. Approximately four million people who make under 30 thousand crowns a month would save around four thousand crowns per year, higher income groups are expected to save less money. The bill has yet to be approved by the Senate.
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